China Equity House: CICC

Australian dollar bond supply surged over 20% to A$212bn (US$139bn), including self-led transactions and excluding ABS, behind only the Covid-distorted A$236bn annual record in 2020 when emergency government supply was more than half the total. “Demand for Australian dollar bonds from Asia has recovered after their withdrawal during Covid, while higher yields everywhere have increased investor appetite for fixed-income instruments, including greater weightings from local superannuation funds to reflect the asset class’s improved relative...

The bank, which was founded in September 2020, topped the Australia/New Zealand equity and equity-linked league table in 2023. It raised A$3.8bn (US$2.6bn) for its clients through 24 transactions with a market share of 15.4%, according to LSEG data. Unlike international peers, Barrenjoey, which means young kangaroo, is locally managed and controlled. Barclays and Australian fund manager Magellan Financial Group have stakes of 18.2% and 36.4% respectively, while Barrenjoey’s staff own 45.4% but with 90.02% voting rights. The set-up allows...

MUFG excelled in long-tenor loans, which were the flavour of the year for Australian borrowers, by leveraging its distribution network, particularly in Japan. “The Asian term loan market and its relevance to Australian and New Zealand borrowers has continued to grow,” said James Poulos, head of loan markets and syndications for Australia and New Zealand at MUFG. “Both Asian and Japanese investors are a key focus of MUFG as we have looked to introduce new sectors and structures to this very important investor base.” The Japanese mega-bank...

China-focused bond houses all had a tough year with China G3 bond volume down by 45% year on year in the wake of the property crisis, weak economy and cheap onshore rates keeping issuers local. But Citic managed to maintain its leading position in the market, as number one in the China onshore market and top Chinese bank in the China G3 bond league table. It printed Rmb1.7trn (US$238bn) in the onshore renminbi market, leading just under 4,000 issues, and US$1.7bn offshore, giving market shares of 7.5% and 4.8%, respectively. Citic stood out for...

As the US raised rates and China eased monetary policy, the interest rate differential between the US dollar and the renminbi widened, making foreign currency loans less appealing. However, StanChart took advantage of the situation to assist borrowers in raising offshore renminbi loans with pricing based on the offshore CNH Hibor as well as the onshore loan prime rate. “We recalibrated our approach and led the market in the development of CNH loans and pioneered offshore dual-currency structures which served to lower the blended financing costs...

Hong Kong property developer Swire frequently conducts private placements, as the company likes the competitive pricing the private market offers, but it rarely taps the public bond market in any currency. Its last public appearance had been in 2016 when it sold US dollar notes. Rising US interest rates and lower Chinese rates meant that renminbi was an appealing funding option. The offshore renminbi bond market allowed issuers to benefit from low rates while their deals looked relatively attractive to investors from onshore China. Banks...

Hong Kong’s stock market started the year strongly after China reopened from almost three years of stringent Covid-19 restrictions. However, this did not last long and a deep correction followed in March. Seeing signs that the market had started to stabilise, Chinese sportswear company Anta on April 17 launched an offer of 119m shares, or 4.2% of the enlarged share capital, in an indicative range of HK$99.08–$102.27 each or a 6%–8.9% discount to the pre-deal close of HK$108.80. Some market participants found it hard to believe the market...

AK Capital ranked fourth for Indian rupee bonds with volume of Rs665.9bn (US$8bn) from 149 issues and market share of 9.7%, according to LSEG data. Public bond issuance revived in 2023, as bond portals mushroomed and tax changes encouraged retail and institutional investors to buy bonds directly rather than through debt mutual funds. AK Capital was one of the top arrangers of public bonds in the Indian market. It printed Rs54.8bn as sole arranger, a testament to its wide retail distribution capabilities. It brought muni bonds to Indian retail...

Unlike some large Indian investment banks which limit their block activity given the risky nature of overnight transactions, IIFL’s strong presence in the institutional broking business means it has plenty of clients who are looking to either buy or sell large blocks of shares. This competitive advantage allows IIFL to place secondary shares with good quality investors, avoiding post-deal panic selling and earning the loyalty of marquee clients. Since 2020, IIFL has been helping Baring Private Equity Asia to monetise its 70% stake in Indian...

Indonesia’s IPO market had a robust start to 2023 with two nickel producers raising almost Rp19trn combined in the first four months, as investors looked for exposure to the electric vehicle value chain. Amman, which had been planning a listing for years, decided to launch its deal in late May. The company was confident that it would benefit from ESG trends. Many renewable energy systems use more copper than traditional power systems and copper is also used in EV batteries, electricity and telecommunications systems. With such wide usage and...

This is reflected in league tables: CIMB was ranked top for Malaysian ringgit bonds, booking M$28.7bn (US$6.2bn) of volume for a 27.6% market share. CIMB was the preferred arranger for sovereigns, supranationals and government agencies across ASEAN last year. As one example, it was joint lead manager and bookrunner on Khazanah’s notable US$1.5bn dual-tranche conventional and sukuk offering in May, the fund’s first rated issuance and its first conventional bond. Despite volatile markets at the time, it achieved a remarkable tightening of 42bp...

Sovereign wealth fund Khazanah obtained inaugural ratings of A3/A– (Moody’s/S&P) in April, in line with the Malaysian state, ahead of its US$1.5bn sukuk and conventional bond offering in May. This allowed it to position itself more assuredly as a quasi-sovereign issuer, since as a rated credit more international investors were able to buy its notes and its bonds became eligible for inclusion in major indices. Without a rating, Khazanah’s early issuances had been smaller in size and their spreads over Malaysia’s US dollar bonds had reached as...