Asia: It just keeps getting stronger

One of the great consequences of the recent global financial crisis is that, on any relative basis, Asia is stronger coming out of the crisis than it was going into it. The importance of Asia as a global market today is undeniable and while it was always important before, what a lot of people had been predicting has now crystallised.

Whether it's Asian equity accounting for a meaningful percentage of global issuance or Asian companies as global acquirers, these weren't a reality 10 years ago. Asia is today fulfilling what has long been hoped for, maybe not always in a straight line but the region has proven during the past 10 years to be incredibly resilient.

In 2000, we were coming out of the Asian crisis and while people had been writing books five years prior about the 21st century being Asia-Pacific's, there was doubt. Yet, Asia has powered through.

Ten years on, Asia is a more mature and more developed market. Clients are very sophisticated, and with that sophistication has come a high expectation of service from the banks themselves. Investment banking services and products have become better understood by Asian corporates, and the willingness to use them and to use them in a strategic fashion has been markedly enhanced.

Today, investment banks are conducting business in local and international markets with clients that have been publically listed for a long time, have done complex M&A deals in the past, and have experienced international management teams. By virtue of the growth of the market, investment banks have had to adapt. Today it is not uncommon to see 30 people on specialised teams with industry and product coverage across geographies, whereas 10 years ago there would have been only fledgling industry groups. All the investment banks have meaningfully localised, and there is now a recognition that key decisions are made in Asia.

Taken holistically or individually, the localisation of the region's capital markets has been one of the most significant developments to emerge in Asia. When the big China state-owned enterprises first began to raise money externally, they all looked to New York. Today, most stay in Asia, as deal size is not an issue. The patent increase in the scale of and access to liquidity has meant that clients have localised, emphatically.

This isn't a phenomenon that is limited to Chinese companies. All companies throughout Asia now feel they can stay local and still get the necessary value and investor following.

The past decade has presented Asia with periods of change, volatility, and perhaps above all, opportunity. There has been vast economic growth in the region and with it, tremendous investment banking opportunities have emerged, and continue to do so.

It is difficult to dispute that China's transformation into a dynamic private sector-led economy and its integration into the global economy has been the most consequential development over the past decade. China's growth performance over the past 10 years has been spectacular and today generally accounts for half of investment banking revenue streams in Asia.

However, the expansion of the rest of Asia's role in the global markets has been no less remarkable. India had been a coming market for some time, but today banks are doing significant business there. There is a lot of ambition in India. Its entrepreneurial dynamic is propelling some leading Indian companies to become increasingly active in high profile international M&A transactions, and they are gaining recognition as credible global competitors in the international markets. Additionally, the value of Australia has continually proven itself time and again and is an important market for banks. Asia has become globally relevant.

Asia's contribution to the investment banking fee pool bears that out. According to Dealogic, Asia-Pacific accounted for less than 10% of the global investment banking fee wallet 10 years ago. Today it is more than 20%, having almost tripled from approximately $4 billion to over $12 billion last year.

During the past 10 years, Asia has emerged from two financial crises. Today, as it looks to fulfil its potential and continue its integration with the global economy, the acceptance of investment banking as a requisite part of the market landscape has increased dramatically. And importantly, investment banks are no longer viewed just as conduits to New York or London; there is a very clear understanding of the regional value proposition that investment banking can provide.

Matthew Ginsburg is managing director and head of investment banking for Asia-Pacific at Barclays Capital.