BEST BANK
Citi
The Best Bank award recognises the bank that stood out both on the investment banking and on the commercial banking fronts.
Citi had a remarkably good year in investment banking, much to the irritation of blue chip pure investment bank rivals who would rather not see a universal bank as competition. It was in the running for the Best M&A House, an active participant in the debt market and showing up on a number of significant equity deals. It owned the India market, which while competitors snipe isn’t lucrative, is still home to several significant global champion companies. Citi’s mantra is that it brought the West to Asia during its more than 100 years in Asia, now it is poised to bring the best of the best of Asia’s companies to the West.
Its commercial bank also had a strong year: Citi reported that its deposits and assets under management hit an all-time high of close to $250 billion and more than $200 billion respectively — a testament to the client trust in the brand in Asia.
A key market to corner, of course, will be China. Citi edged ahead in the race this year when it became the first global bank to issue sole-branded credit cards in China and opened Citi Orient Securities, its China securities JV, both significant breakthroughs. The credit card coup will no doubt soon be followed by other banks once they get regulatory approval, but for now Citi is the lone leader. The JV means Citi can finally operate in the Chinese domestic market, crucially in equity and debt underwriting and advisory services. Whether the JV is successful remains to be seen, but you can’t claim leadership in the region’s most important market without it. Citi ticked the right boxes in China this year.
It also continued to expand its cash management and trade franchise across the region, capturing flows and market shares as corporate and institutional clients globalise. This is a heated battleground with international banks and regional competitors continuously snagging market share from one another.
On the retail front, Citi claims to be the first bank to surpass the 1 million mobile banking customer landmark in Asia in 2012, underscoring the notion that the brick and mortar franchise front may one day be a thing of history. Indeed, the franchises that remain need to be “smart”. That’s precisely what Citi is honing in on, as it continued to roll out more of what it calls smart-banking franchises. The first was launched in Japan in 2009. Citi now has more than 600 branches in Asia of which 130 are smart branches that have interactive media walls, touchscreens on a series of “planning tables,” and interactive “work benches”. Customers can also opt for a live video conference with a remote Citi specialist. Making banking feel more like a cross between a visit to the Apple shop and getting a starring role in the futuristic flick Minority Report, is good for the industry. It helps the bank and customer consolidate banking business (and is a movement away from the insanely frustrating need to re-write your information multiple times causing one to wonder if efficiency is even an aim at other banks). It makes banking feel (almost) hip and fun, not a chore to be put off until you can’t avoid it. Citi’s smart banks are the future, and sure to be copied.
BEST COMMERCIAL BANK
HSBC
HSBC’s dominance in lending and debt in Asia made it a go-to bank for most corporations across the region, which helped it win this award this year.
HSBC has a commercial banking presence in 19 markets across Asia — the little red logo a ubiquitous sign in the region’s airports and on landmark buildings. It reported that profit before taxes reached $3.5 billion in Asia as of the end of the third quarter, which was up 20.1% from the same period in 2011. That suggests an increasingly efficient business during turbulent times.
While clients (who aren’t also shareholders) don’t really care about HSBC’s profits, they do care about their banking experience. The bank has been working on an initiative to create more consistency across borders for its international products, such as accounting opening processes and cross-border credit. The bank has evidently succeeded in getting the message out about these efforts, given that the number of HSBC’s international customers has grown double digits year-on-year.
Its leading global payment and cash management and trade franchises is further evidence that it is helping companies optimise their cash flows and run as efficiently as possible. Across the region it has more than 111,000 branches and “points of presence” that can offer payment and cash management solutions. On the global trade and supply chain and receivables finance front, it continues to expand its on-line transaction capabilities, which is unquestionably what distinguishes global trade banks from the rest of the wannabe competition cropping up in the region.
Where it undoubtedly leads the way is on the renminbi front, which is a critical growth market in Asia. It was the first foreign bank to execute a renminbi transaction and then later the first to settle cross-border renminbi trade across all six continents. It now has renminbi capabilities in more than 50 countries and territories globally. And it also stands out for offering a trade-finance standard rate that served as a benchmark for renminbi financing in Hong Kong.
In Hong Kong it boasts more than 280,000 corporate accounts with renminbi capabilities. In the first half of 2012 alone, HSBC said its cross-border referrals between Hong Kong and mainland China grew by 13% and 10% between Hong Kong and the rest of the world. Furthermore, HSBC Taiwan is the first foreign bank with a licence to offer renminbi products and services and it was the first foreign bank to complete renminbi cross-border transaction in Taiwan.
Finally, on the retail front, it has certainly picked its spots strategically but it has broadened its range of products and services to meet the retail banking and wealth management needs of individual customers. As of the end of the third quarter, the retail banking and wealth management segment of the bank had increased profits in Asia by 11% to $3.9 billion, driven by strong lending and deposit growth and revenues from increased sales of wealth management products. Not surprisingly, in Hong Kong it maintained its number one position in deposits, mortgages, cards, life insurance and the Mandatory Provident Fund. But in the rest of Asia-Pacific, its strategy of improving efficiency and growing its assets and wealth business delivered strong results, with profits growing by 20% in the first half of 2012 vs first half 2011. Ironically, that’s proof that more clients around Asia see HSBC as its local bank, even if the bank has decided to ditch that marketing phrase as its catch line.
BEST INVESTMENT BANK
Goldman Sachs
In a year when there wasn’t a sexy theme — the driver of business was having a balanced franchise. You needed to be present everywhere, not just dominant in China, and you needed to have your finger in all of the product pies.
Goldman Sachs had a solid year on all fronts: it won our M&A House Award, was very much in contention to win the equity award and in a year where having a debt franchise mattered, the investment bank showed its all-around strength and was present on key debt deals as well. As one of its senior executives put it, “the rise of our debt business from an also-ran to a top five player is enormous”. (As we went to press Goldman Sachs was fifth in G3 bonds, and second in G3 corporate investment grade bond rankings for bookrunners, according to Dealogic).
As their senior executives put it, 2012 was a year where “the world was upside down”. Think about it: combined business out of Southeast Asia was busier than China, debt busier than new listings, and yet in many categories Goldman Sachs was still at the top of the league tables.
Of course, league tables aren’t everything. And what Goldman has in its favour is a reputation for driving the bus, not just sitting alongside as a passenger. That, of course, is increasingly important to distinguish as transactions nowadays seem to have a laundry-list of banks. Consider AIA Group’s sell-downs by AIG. Those transactions weren’t bid out, but rather AIG mandated banks based on existing relationships. But Goldman (along with Deutsche Bank) was both times named as joint global coordinators and joint bookrunners and they were the only two banks that were actively taking orders from investors. The other seven banks had more passive roles. Even on PICC Group’s $3.1 billion IPO in Hong Kong, which featured 17 bookrunners, Goldman distinguished itself from its peers as one of the five global coordinators leading the transaction.
On the M&A front (in addition to what we’ve noted in that award’s write-up), Goldman has advised on chunky deals this year, but also has a robust pipeline of transactions that are announced and nearly across the line but are likely going to be considered “2012 deals” when we look at the awards next year. Consider the ING sale of their life insurance businesses and the Cnooc-Nexon deal. While competitors will snipe that Goldman was on the Canada side of that transaction rather than the China side, and that it was effectively a government-to-government deal, the fact is, Goldman was there, banking key clients who were looking to Asia for liquidity.
In debt, Goldman joined Citi, Deutsche Bank and UBS on Temasek Holdings’ $1.7 billion dual-tranche bond — a blue-chip client that all its rivals want to bank. Indeed, it was there for other marquee clients, ranging from Hutchison to Samsung.
In a year gone mad, Goldman kept a cool head and did what it does best: offered good advice to key clients.
BEST PRIVATE BANK
UBS
Our hypothetical private banking client this year was a Singaporean entrepreneur who wanted to fund an expedition to find sunken treasure, which he was planning to do after retirement in five years. As the 60% owner of a Singapore-listed retailer with few personal assets, he wanted to find the best route to amassing a lump sum of $10 million that he could use to embark on his adventure.
The simplest option was to sell 9% of his business, which had a market capitalisation of $100 million, retain the controlling stake and walk away with a lump sum in his pocket. He could do that right away and sail into the sunset the next day. All the private banks we met acknowledged this option, and some recommended it as the best way to go. The future is scary and unknowable, so why bother waiting to find out what it has in store?
But UBS had an option that exploited our entrepreneur’s natural risk appetite. Instead of bamboozling him with financial wizardry that he might never fully understand, the Swiss bank came up with the idea of leveraging his entrepreneurial skills instead — and presented a business plan that would help him take his company into China.
This way, he would keep his entire shareholding in the company he founded and earn the lump sum through the growth of the business in China. It is probably a riskier plan, at least on paper, but they are the kinds of risks that an entrepreneur can understand and manage. Some of the competing proposals involved our entrepreneur pledging his shares and ultimately putting his controlling stake at risk. The client was a buccaneering type with a healthy appetite for risk and was open to all ideas, but losing control of his business was not an outcome he really wanted to flirt with.
The UBS proposal laid out a clear strategy for taking his business into China — so clear, in fact, that it looked like a real-world proposal — and provided financing to make the expansion possible. It was obviously leveraging its experience in helping other companies do the same thing. More important, the amount of business that UBS would have won from such a proposal was far greater than any of the other solutions, yet the client stayed in control all the way and had a much higher potential upside. Of course, it is hard to quantify the potential downside of a failed expansion of this nature, but, as we have noted, such risks were aligned to the client’s own strengths.
Overall, we thought UBS’s proposal was such a clear winning solution that we were tempted to take them up on the offer, not least so we could retire a few years down the line and go searching for Spanish gold.
BEST M&A HOUSE
Goldman Sachs
M&A volumes were down by roughly 10% during 2012 and there were few strong themes for investment banks to exploit. It was the kind of year that was defined by the strength of franchises and, given the weak volume, a little bit of luck.
Goldman Sachs has plenty of that. But it also clearly provides high-quality M&A advice and is the one bank on the street that everyone else mentions as a rival. In a year when equities were less prominent, M&A has been an important tool — and Goldman has been at the forefront of some of the year’s most creative advice.
Indeed, Goldman drove the deal that we awarded as the best M&A transaction of the year: Fraser and Neave’s sale of Asia Pacific Breweries to Heineken. A host of banks included this deal in their pitches and took league table credit for it, but as F&N’s adviser Goldman was really in the driving seat. Most important, it helped the client to maximise the profits from its sale — and Goldman continues to work on the sale of the F&N business to OUE, which has all the hallmarks of being one of next year’s top deals.
Also in Southeast Asia, Goldman advised 1Malaysia Development, a government-owned strategic development company, on the acquisition of two separate power assets — one from Tanjong and the other from Genting, for a total of more than $3 billion.
It is also advising on some of the year’s most prominent almost-closed transactions. Deals that straddle the year-end tend to suffer slightly in our estimation as they drag from one year to the next, but we certainly recognised Goldman’s impressive list of deals awaiting formal approvals, such as Nexen’s sale to Cnooc for $15.1 billion, as well as ING’s disposal of insurance businesses in Hong Kong, Macau and Thailand to China Pacific, and the sale of the Malaysia business to AIA.
There were also some misses during the year, but Goldman was always in and around the action. As adviser to ANZ, it missed out on the acquisition of Korea Exchange Bank, which went to local bidder Hana Bank, and it was conflicted out of the HKEx acquisition of the London Metal Exchange thanks to its board seat at the LME.
In China, Goldman helped Yahoo to exit its Alibaba stake in the biggest deal of the year. We see that as a Credit Suisse deal primarily, but Goldman was once again at the centre of action, even if it wasn’t in the driver’s seat on that deal.
Credit Suisse’s role on Alibaba, combined with its strong overall showing, came close to clinching this award for the Swiss bank. But, in the end, the quality of Goldman’s deals and its ubiquitous presence sealed the win in a tough year.
BEST EQUITY HOUSE
UBS
The last time UBS won this award was in 2008. Since then lots have happened within the firm and while most of its troubles didn’t originate in Asia, the fallout did not spare its businesses here. The bank continued to win and execute ECM deals but was left off top mandates and rivals stopped viewing it as the key competitor it once was.
That has all changed this year. At a time when IPO volumes have dwindled, Chinese companies have curtailed their capital raisings while waiting for a top leadership change and fees on public market deals have shrunk significantly, UBS has executed almost 30% more equity deals than its closest competitor and has made good money doing it. Even rival bankers are acknowledging that the firm “has had a good year”.
The key to its success is that it decided, in its own words, to rip up the old playbook and become more innovative and proactive when it comes to providing solutions for clients – whether looking for the most efficient way for a company to raise capital, helping investor clients offload illiquid positions, or getting investors access to shares in a particular name or sector.
The pickup in private placements, or “club deals”, like the pre-IPO placement of Formula One shares that we awarded as the Best Equity Deal this year, is a one direct result of this strategy. Another well-received deal along these lines was Permira’s $755 million sell-down in Galaxy Entertainment in August, which was targeted at a small group of investors only.
But UBS has also been thinking out of the box in terms of the how to source deals and when to execute them in order to achieve the desired outcome for the issuer or seller. And since clients are quite happy to pay for these types of solutions, they have helped put some margin back into the business.
Other deals that stood out included a $1.4 billion H-share placement for China Minsheng Bank, an $8.9 billion A- and H-share private placement for Bank of Communications, and a $1.3 billion top-up placement for Kunlun Energy.
UBS wasn’t involved in the IPOs of either IHH Healthcare or Felda in Malaysia, which does look like a miss, but it did have a leading role on Astro Malaysia’s $1.5 billion IPO and also helped Maybank raise $1.2 billion from a highly successful overnight deal, silencing those who had been saying that it was weak in Malaysia. In terms of new listings it was also instrumental in getting Haitong Securities’ H-share listing across the line this year and acted as the sole bookrunner on GT Capital’s $504 million IPO, which was the third largest Philippine IPO ever.
UBS isn’t alone in realising that a different business model is needed in order to make money in Asia ECM, but it is the bank that has been the most successful in moving its business in a new direction this year. For that and for the number of quality deals it has delivered it deserves the title as this year’s Best Equity House.
BEST IPO HOUSE
Deutsche Bank
It has been a tough year for IPOs. Volumes are sharply down from last year and institutional investors have largely turned away from the product after losing a lot of money on new listings at the end of last year and in the first half this year. Many deals were cancelled before pricing or didn’t launch at all, but most of the larger deals did get done and Deutsche Bank worked on those.
The bank was involved in all of the top-five new listings in the region, and had a leading role on three of them, including IHH Healthcare’s $2.1 billion offering that won our award for Best IPO this year, and PICC Group’s $3.1 billion Hong Kong IPO where it was named a global coordinator alongside the four sponsors out of a list of 17 bookrunners.
IHH Healthcare’s listing in Malaysia and Singapore went extremely smoothly and was almost a textbook example of how to do an IPO. By comparison, Haitong Securities’ second attempt at an H-share IPO took a lot more effort. Together with the other global coordinators, Deutsche Bank brought in additional cornerstones to make sure the $1.9 billion deal didn’t fail a second time and enabled the company to price at a premium valuation to what its bigger rival had achieved when it listed in Hong Kong seven months earlier.
Indeed, while it generally seems to have picked good companies to bring to market, such as IHH, Felda, Astro and IGB Reit in Malaysia, or EastWest Banking Corp in the Philippines, Deutsche didn’t back away from the difficult trades. One example of that is the $73 million US IPO of online discount retailer Vipshop in March, which it led together with Goldman Sachs. The deal, which was the first Chinese listing in the US in seven months, priced 23% below the indicated range and even then it took a lot of work by the bookrunners to fill the order book. However, in the past three months the stock has surged and by mid-December it was up 90%, indicating that the work put in to bring the company to market was worthwhile after all.
Deutsche also brought iconic Hong Kong restaurant chain Tsui Wah to market in early December with a $98 million IPO, which was the first deal in a long time to attract a sizeable retail following.
IPOs in Asia this year have been a lot about lining up sufficient demand from cornerstones and anchor investors before launch to create positive momentum. And Deutsche Bank has proven that it is able to convert early interest into actual orders. Like other banks it has been forced to source some of that demand from companies and high-net worth investors in China but that is what it took to get deals done this year, particularly in the mid-cap space.
In all, Deutsche Bank has brought 13 new listings to market this year, the same number as its closest international rival, which is J.P. Morgan. However, in terms of deal value, Deutsche has a 5.1% market share compared to J.P. Morgan’s 3.9%.
The German bank has also worked on a good mix of deals. Sure, it has its share of cancelled offerings, but in a challenging year like this, that shouldn’t take away from the deals that were completed. If anything, we note that if the $1 billion IPO of Graff Diamonds had got done, Deutsche Bank’s position as the Best IPO House in the region would have been even stronger.
BEST EQUITY-LINKED HOUSE
Not awarded
We have made the decision not to award this category for 2012 in light of the thin volumes (outside China’s A-share market there have been only $7.3 billion of new issuance, accounting for less than 7% of the total ECM volume). With the most active banks having worked on just a handful of public market deals each and few stand-out transactions, the basis for making a credible decision is simply too weak.
BEST INTERNATIONAL BOND HOUSE/BEST OFFSHORE RENMINBI HOUSE/BEST LOCAL CURRENCY BOND HOUSE
HSBC
HSBC wins the Best International Bond House award for the depth and breadth of its business in Asia’s primary debt markets in 2012. The bank’s detractors (and there are a few) point to its use of balance sheet to land deals and suggest that it has an easier job than most in winning bond mandates. It is no doubt true that HSBC leverages off its lending relationships. But every bank plays to its strengths, be it private banking relationships or an investment banking franchise. In terms of sheer volume, the bank clearly dominates league tables, with a market share of 14.3%, a sweeping margin over its two closest competitors Citi and J.P. Morgan, which both have a 9.8% share, according to Dealogic.
But volumes weren’t the only reason why HSBC won the award. The bank also played a role in offerings and repeat mandates from many of Asia’s sophisticated borrowers — including Hutchison Whampoa and Export-Import Bank of Korea, Reliance Industries, Korea Development Bank and Indonesia.
In a number of instances, the bank was retained for a second issue as other banks fell away. This included Hutchison Whampoa — where HSBC and Goldman Sachs were two of three banks retained for its $1 billion tap early this year; and Reliance Industries’ where HSBC was one of three other banks retained for the tap. It was also at the forefront of a wave of Hong Kong companies tapping the market, which was very much a theme in 2012; and it brought roughly two thirds of the debut borrowers to market in 2012.
Previous criticisms of HSBC have focused on its plain vanilla side, but HBSC has become more active on structured deals — arranging hybrids for Li & Fung, Hutchison Whampoa and ICTSI. On the high-yield front, it also topped league tables, effectively leveraging off its commercial banking relationships.
HSBC has come a ways: For a long time critics have pointed out that the bank punched below its weight, but that is no longer true. In our view, it shows a commitment to the market, it has a well-oiled platform and on-the-ground penetration that few others can compete with.
Within the offshore renminbi bond market, HSBC held onto its lock on the market and played a role on the landmark deals which defined the year. It shepherded some 22 international issuers to the dim sum market, acting as a sole bookrunner for nine of them. It also played a role in broadening the investor base for offshore renminbi bonds.
Its list of sole led deals include Mexican telco America Movil’s dim sum, the first SEC-registered deal for the offshore renminbi bond market and the first dim sum for a Latin American borrower. For the first time, onshore US investors could participate in the offshore renminbi market and accounted for 26% of the deal. In a similar vein, its self-led Rmb2 billion dim sum bond was the first London executed dim sum bond and European investors took 60% of the deal.
It was also a sole bookrunner on AAA-rated German Bank KfW and on the other end of the spectrum, it led Gemdale’s Rmb1.2 billion debut dim sum, which stood out as the first international offering from an A-share listed company without a guarantee from the onshore entity. The deal was also a debut international offering for the high-yield property developer and HSBC steered the company through its ratings process. The transaction offered a template for other mainland companies to tap the dim sum space without a guarantee.
Pushing tenors in the dim sum market continues to be a challenge as investors are focused on currency appreciation. In this respect, HSBC was one of the arrangers for China Development Bank’s 20-year bond — which is the longest dim sum bond ever sold. It was also one of the arrangers for Ford Motor Company, which issued the first dim sum bond from a high-yield multi-national company.
On the local currency bonds side, HSBC continued to have a standout year. According to Dealogic, it held a 19.7% market share for cross border local currency bonds. This is the part of the market where there is money to be made out of swaps, and HSBC was ahead of its main rival Standard Chartered which had a 13.9% market share.
Only a handful of banks can offer issuers discussions on which local currency bond market best suits their needs, and which offer them the lowest cost of funding. HSBC proved it was the bank to go to a number of occasions. One example of this was Dah Sing Bank which had sent out an RFP for a dollar bond, but ended up issuing a S$225 million tier-2 which provided it about 30bp of cost savings. HSBC acted as sole books on the trade.
It was also active in bringing corporate hybrids to local currency bond markets and capitalising on rising private banking demand in Asia for such products. Notably, it was a global coordinator for Genting Singapore’s S$1.8 billion perpetual, which is the largest corporate hybrid issued in a local currency market. It was also involved in other landmark jumbo deals such as San Miguel’s Ps80 billion perpetual preferred shares.
BEST HIGH-YIELD BOND HOUSE
Deutsche Bank
This simply wasn’t the year for high-yield. Investment-grade bonds shone –with total issuance more than doubling in 2012 from the previous year — while high-yield bonds posted only a marginal rise. It was a difficult year to pick a standout winner. HSBC was at the top of league tables, followed closely by UBS and Deutsche. In the end, our vote for the best high-yield bond house fell to Deutsche Bank, which was third in league table rankings, having raised $1.8 billion with a 12.7% market share, according to Dealogic.
HSBC’s high-yield deal flow was driven by its lending relationships with Chinese property companies, while UBS relied heavily on its private wealth management arm, which helped it place deals and originate mandates. Which is perfectly fine. But in the end, we felt that Deutsche had a wider distribution reach — particularly into the high-yield US investor base — than the other two banks and proved it could carry large deals across the line in challenging market conditions.
It demonstrated this with Studio City’s $825 million high-yield bond, where it acted as the left lead. Studio City wasn’t an easy sell — it was a project finance bond and cash flows did not start kicking in till 2016. It also came at a time when sentiment among Asian investors towards high-yield bonds had soured after recent Chinese property deals performed poorly in the secondary market. But the deal got done thanks to US investors, which were allocated 70% of the deal. The bonds traded up in the secondary market and helped the gaming company raise funds it needed. In contrast, Global A&T Electronics, which was marketed around the same time, was forced to postpone its deal.
In a year when issuance was patchy, large deals tended to move the needle. Citic Pacific — which tapped the market twice, each time raising $750 million — was one such issuer. Deutsche was involved in both transactions (as were HSBC, UBS and Standard Chartered). It played a passive role on the first one and an active global coordinator role on the second one — the10.25-year bond, which scored a lower coupon than its 5.75-year bond which priced earlier in the year.
The bank was active on Chinese real estate deals and also brought two debut borrowers to market — namely Sound Global and Sunac China Holdings. It continued to have repeat mandates from a handful of clients including China Shanshui Cement, Chandra Asri, Shui On Land, Lippo Karawaci and Melco Crown and was also active on the liability management front, handling exercises for Chandra Asri, Lippo Karawaci and China Oriental Group.
BORROWER OF THE YEAR
Nan Fung International Holdings
When Hong Kong-based Nan Fung International decided to finally approach the debt capital markets, it was no half-hearted move. Rather than just jump in and make the most of the low yields on an unrated basis as a number of other companies did, it put in the effort and worked with HSBC to obtain a credit rating from all three major agencies. Backed by a 30-year operating history, a strong brand with a prime focus on luxury residential properties, strong balance sheet liquidity and low leverage, it received an investment grade Baa3 rating from Moody’s and the equivalent BBB- from S&P. Fitch rated it one notch higher at BBB.
Those in the bag, the company hit the market in mid-January with its debut bond — a $350 million five-year deal that was priced at 460bp over Treasuries.
This made unlisted Nan Fung the first investment grade-rated and non-government-related private company to sell international bonds, effectively opening up the public markets for other private issuers. It was also the first debut issuer to hit the market in 2012, showing its confidence.
The deal, which was led by Goldman Sachs, HSBC and J.P. Morgan, was also extremely well timed, capturing a window just before European markets started to weaken — the fact that it launched and priced on a Friday suggests that this wasn’t a fluke — and generated an impressive $1.3 billion of demand with orders from more than 90 accounts.
This enabled Nan Fung to do a $250 million tap of the same bond in February, increasing the total issuance to benchmark size, $600 million.
And it didn’t stop there. In August it set up a $1 billion medium-term note programme and in September it upped the ante by printing a $300 million 10-year bond at 280bp over Treasuries — the tightest spread ever for a Hong Kong property developer in the BBB space. The deal attracted 200 orders and $5.8 billion of demand, indicating a growing awareness of the issuer among international investors. This time the line-up of bookrunners looked more like a reflection of Nan Fung’s existing banking relationships with Agricultural Bank of China (HK), Bank of China (HK), BOCI, Citi, DBS, HSBC and Morgan Stanley on the ticket.
Obviously Nan Fung doesn’t rival the volumes of repeat issuers like Hutchison Whampoa, Kexim or Reliance, but given that it has never been to the bond markets before, three issues in the space of eight months is impressive. And the fact that it underpinned them by credit ratings from three major agencies to ensure a more widespread take-up — 49% of the first issue and 71% of the September deal was bought by investors other than private banks and the fund participation increased from 13% to 28% between the first and the third bonds — makes it particularly noteworthy.
The fact that it also took the opportunity to put in place a proper corporate governance structure, including an audit committee, clinches its position as Asia’s best borrower this year.
BEST EQUITY BROKERAGE
Credit Suisse
Credit Suisse continues to strengthen market share in its brokerage business despite a tough year for cash equities, particularly in Hong Kong, where volumes have been disappointing.
The bank boasts top rankings among foreign brokers on all of the major exchanges in Asia — Hong Kong, India, Korea, Malaysia, Singapore and Taiwan. It has 150 analysts covering more than 1,000 stocks in the region and has launched a new client service team and technology platform focused on delivering multi-asset analytics solutions.
Its Swiss rival, UBS, is still a formidable competitor and maintains its strong position in Hong Kong, but the high-profile trial of a rogue trader in London and some other negative headlines have knocked it from its perch as the unrivalled market leader. Credit Suisse claims to have benefited from that, picking up prime broking mandates from all the major Asian hedge fund launches during 2012 — and it aims to continue this charge.
Indeed, prime brokerage has become one of the most important areas of the business in the wake of the financial crisis, and Credit Suisse’s growing strength in this market has added to its already impressive position in cash equities and derivatives.
Its annual Asian investment conference is the biggest such event in the region and helps the bank to conduct meetings with thousands of investors every year.
AES, its electronic trading platform, is the best in the industry and the suite of products it offers, across 14 countries in Asia, is unmatched. Crossfinder is now the biggest broker dark pool in Asia and the bank also launched a trading strategy during 2012, AES Guerilla, to help clients find extra liquidity in challenging markets.
Finally, its derivatives business has continued to win market share since poaching several prominent team members from UBS after the crisis. During 2012 it focused on algorithmic indices and fund-linked products, in response to clients’ changing needs.
