Best Equity House
Morgan Stanley
For the first time since 1991, Morgan Stanley topped the Asian equity league tables this year. According to Dealogic figures, the US investment bank had a league table weighting of $9.7 billion from 35 deals as of December 14.
This gives it a market share of 12.3% compared to 9.6% for Goldman Sachs, which has come second with a $7.7 billion weighting from 32 deals and 8.7% for UBS, which has come third on $6.96 billion from 31 deals. Almost 80% of Morgan Stanley's volume was generated during the second half of the year and particularly during the final quarter when it has shown considerable momentum even after discounting its monster IPO for China Construction Bank (CCB).
Some of its critics have complained that CCB unfairly distorts the 2005 equity league tables and that without it, Morgan Stanley would rank third. However, this is somewhat unfair on two counts.
Firstly if Morgan Stanley had not had to devote so many of its resources to CCB, then it would have undoubtedly concentrated on bringing other deals to markets. Secondly, CCB is the most important equity transaction of the year and its size and success deserve a very strong weighting.
Executing the world's largest IPO in five years was never going to be easy. Executing an IPO from a sector that many thought teetering on the verge of collapse just a few short years ago was nothing short of remarkable. It is testament to the bank's structuring and marketing skills that it managed to complete the deal without any hiccups, price it a valuation no-one had previously considered feasible and do so in the knowledge that the deal was likely to hold firm in the secondary market.
In the hotly contested category for secondary market offering, Morgan Stanley features on all three of our shortlisted deals for Chunghwa Telecom, LG Philips LCD and ICICI Bank. Breaking into Chunghwa Telecom's $2.56 billion follow-on offering was something of a coup given that MS was favoured over one of the group's incumbent house banks.
It shows how the bank has stepped up its presence in the Island Republic over the past few years - retaining house clients such as UMC, which completed a $381 million convertible in late September and consolidating its hold over newer ones such as Chi Mei, which completed a $751 million follow-on offering and Shin Kong Financial, which bought a $220 million CB in early December.
So too, Morgan Stanley has had a strong presence in North Asia's other big equity market - Korea. This has largely been due to its relationship with TFT-LCD producer LG Philips LCD, which became the Republic's most active issuer this year after executing three big deals all of which featured Morgan Stanley as a lead manager. On the last deal of the year - a $742 million block on behalf of Philips completed on December 15, it acted as sole bookrunner for the first time.
Outside of North Asia, Morgan has always been strong in the region's other big market - India. Through its joint-venture JM Morgan Stanley, it has executed a whole range of small-cap, mid-cap and blue chip deals. This year, the range spans Shringar Cinemas, which raised $10 million from an IPO in April, alternative energy provider Suzlon Energy, whose hotly anticipated IPO raised $344 million in October and ICICI Bank, which bought the country's largest follow-on deal in early December raising $1.75 billion.
In South East Asia, it has historically been a lot less strong, although it has just about kept its head above water with a $143 million follow-on offering for SingTel.
Its other major strength lies in the China mid-cap space, where the investments of its principal investment arm have helped generate a slew of business and a strong brand name to market them. This year the bank has completed a follow on for Mengniu Dairy and a well-received IPO for China Paradise.
For the past year Morgan Stanley's ECM team has been successfully run by the bank's former Asian M&A head, Gokul Laroia whose wry calmness has proved a perfect foil to the intense enthusiasm of his TMT expert Crawford Jamieson and the magniloquence of China mid-cap expert George Taylor.
Best M&A House
Goldman Sachs
Adjudicating the M&A category this year was not the most straightforward of tasks. For much of the year Goldman led the league tables, but with the unraveling of the Pakistan Telecom sale, it suddenly lost $2.5 billion of credit in the completed transaction league table - putting it marginally behind Morgan Stanley in volume terms (Goldman finished on $21.5 billion of completed deals, versus $22.19 billion for Morgan Stanley).
Both firms still retain marquee M&A franchises in the region, although this year UBS built on its successes in 2004 to prove that it is now a serious M&A contender too. Deals for Hutch in Europe, Vodafone buying into Bharti, Standard Chartered's Korea First acquisition, and its advice on Hite Jinro all stand out as major M&A transactions. But UBS was hampered by one thing: it lacked roles on significant China M&As.
What stood out about Goldman this year was the geographical breadth of its business and the quality and significance of the transactions it worked on. It was the sellside advisor on our Cross-border M&A deal of the year (CNPC buying PetroKazakhstan). It also advised on the other landmark China transaction, Lenovo's acquisition of IBM's PC business. It advised Carlyle on the China Pacific Life deal.
In India it advised on the Hutchison Essar BPL deal; in Korea it advised on Hyundai Card's sale to GE Consumer Finance; in Hong Kong it advised on Netcom's acquisition of a stake in PCCW; in Singapore on the Natsteel-Tata Steel deal; in Indonesia on the highly innovative Adaro coal mine transaction.
In fact, it completed transactions in 10 markets (and still retains the sellside role for Pakistan Telecom). It had 11 sellside mandates and 12 buyside, displaying the sort of balance an M&A franchise requires to thrive.
It has also worked with financial sponsors on six transactions, which is important to bear in mind, given its competitors are quick to say Goldman's M&A relationships with private equity sponsors have been tarnished by its own willingness to principal invest. We cannot be sure whether Goldman's rivals will prove right in their claim, but this award looks backwards over the year and the evidence of 2005 suggests Goldman is equally capable of working with financial sponsors, as well as making savvy investments of its own (such as Adaro, Hana Bank and Focus Media).
But when we said this category was not straightforward to judge, this particular criticism of Goldman was one of the reasons that gave us pause. Another was the failure of CNOOC's attempt to acquire Unocal - where Goldman was an advisor to CNOOC. Whether you can fully blame the advisors for what became a geopolitical bunfight can be debated indefinitely.
What is less debatable is the fact that Goldman has been involved in many of the major M&A situations this year - albeit in different shapes and forms (in the case of Hite Jinro it was a creditor and had a major influence on the M&A process from behind the scenes.)
And as the year closes, Goldman is advising on KT Freetel's sale of a stake to NTT Docomo, a transaction that once again demonstrates the firm's ability to land the region's most meaningful strategic deals.
Best International Bond House
Deutsche Bank
Once again, this prize was one of the most hotly contested awards of the year. In a parallel of 2004, the choice for the best G3 House was between Citi and Deutsche and the results were so close it almost came down to who replied to our emails faster.
Last year's winner - Citigroup - was always going to be a strong candidate. It is a league table leader and a dominant force among the region's sovereign issuers. Overall it has had a wide breadth of deals this year spanning investment grade and non investment grade, quasi-sovereign and corporates.
Cleary, it was always going to be the team to beat among the competition. And truly it was a tale of the tape, to steal a boxing analogy.
Across almost all of the vital statistics Deutsche Bank and Citi were within inches of each other. They stood toe to toe on overall G3 issuance, jumbo issuance, sovereign issuance and investment grade issuance, depending on whose league table you were provided with. So the question that sat heavily upon us was; what are the deciding factors?
Citi has had a great year executing jumbo deals and has easily been the market leader among sovereign issuers with six deals to its credit spanning Indonesia, Korea, Pakistan and the Philippines. However, it was Deutsche Bank's balance among FIG, corporates, and sovereigns/quasi-sovereigns issuers, coupled with a very strong dedication to high-yield issuance and non-dollar deals that proved to be the deciding factor.
It also jumped ahead in wallet share in the days before our awards closed thanks to its completion of a tricky single-B rated deal for Thai pulp and paper company Advance Agro. Indeed, 2005 was marked by the further emergence of a sustainable high-yield debt market and Deutsche showed plenty of commitment in the promotion of non-investment grade names. Its roster of deals encompasses Stats ChipPAC from Singapore, Xinao Gas in China, Chaoda Modern Agriculture in China and the aforementioned Advanced Agro - the lowest rated issuer to ever come out of Asia.
Additionally, in a market still heavily dominated by dollar denominated issuance, Deutsche managed to notch up 20% of its business in euros - an almost unheard of number in the region. As a major European bank, Deutsche has made a concerted effort to play to its strengths and take Asian issuers into the European market, helping to open up the Asian debt capital market to a wider range of investors, something that many of the more American focused houses seem reluctant to do.
In the end, the decision came down to the bank that did the most in order to facilitate the maturity and growth of the Asian debt markets, and this year Deutsche Bank's platform was truly a market leader.
Best High Yield Bond House
Credit Suisse First Boston
In many ways 2005 has been a coming of age for CSFB's high yield bond franchise. The bank as a whole has always had a strong investment banking platform in both Indonesia and the Philippines - two key high yield markets capable of generating a steady stream of bond business should investors prove receptive to it. In 2005 CSFB's DCM team has stepped up to the plate under the leadership of Jon Pratt - one of Asia's most dedicated bond bankers and his longstanding and loyal sidekick, Alister Moss - the bank's down to earth debt syndicate head.
In winning the award, CSFB went head to head with JPMorgan and it was a close call between the two. Both have had their share of successes and failures or in CSFB's case near misses with Satieri and Megasteel
We counted six key deals from JPM that raised a total of $3.175 billion. Among these, Adaro was awarded our Best Non-Investment Grade deal of the year, while Hanaro was one of the most heavily oversubscribed and Shui On pushed the envelope for what could be achieved in the Chinese property sector. In total, the US investment bank bought four debut borrowers to market and was the sole lead manager on two deals.
In its favour, JPMorgan ranked top of the league tables in terms of wallet share and was responsible for some of the sector's most innovative and landmark deals.
By contrast, we counted nine transactions under the lead management of CSFB, which raised a total of $4.75 billion. Of this number five were debut transactions and two were sole led.
What we felt CSFB had in its favour was geographical breadth and a good mix of debut borrowers, repeat borrowers and sovereign transactions.
Most notable of all was its completion of a $750 million inaugural transaction for the Socialist Republic of Vietnam. The deal has been almost 10 years in the making and investors lapped up its rarity value.
As its longstanding ratings advisor, CSFB was instrumental in helping the sovereign make a crucial jump from B1 to Ba3 in July, which paved the way for pricing inside of both the Philippines and Indonesia.
In the corporate high yield space, CSFB has been particularly active raising funds for Indosat and Gajah Tunggal in Indonesia, Universal Robina Corporation in the Philippines, Hopson and Chaoda in China and Stats ChipPAC and Avago in Singapore. It also completed a successful consent and solicitation tender offering for PLDT in the Philippines.
Many of these corporate bonds were notable. Deals by Indosat never fail to go well and 2005 was no exception even though its $250 million deal was executed in mid June at a time when the Asian markets were not really that receptive to high yield paper.
Gajah Tunggal's deal was also groundbreaking because it pushed investors down the Indonesian credit curve and showed that some of the country's disgraced borrowers could rehabilitate themselves through bond markets.
Universal Robina Corp's $200 million eurbond has been the only corporate bond from the Philippines this year and was well-timed from the issuer's perspective - slipping into the market ahead of renewed sovereign ratings pressure and concerns about the country's budget deficit.
And finally in the lucrative China mid-cap space, CSFB has had a fair measure of success. One of its best and most lucrative deals of the year was a $300 million issue for Hopson Development, one of the biggest property developers in Guangdong province. The Ba1/BB+ rated group's seven non-call four deal represented the first high yield offering from the Chinese property sector.
Best Equity-Linked House
JPMorgan
This is the second year running JPMorgan has won the Best Equity-Linked Award. It is also a year in which it has further increased its market share in a sector it is coming to dominate.
Overall issuance on the year, however, is down on 2004. Equity-linked deals have only accounted for 11% of the new issue market in 2005 compared to 26% in 2004. About $8.4 billion has been raised year-to-date, with JPMorgan involved on transactions raising a total of $2.308 billion - 27% of the total market.
The US investment bank has led 13 deals for a range of small-cap to blue chip issuers and across a number of countries. At the one of the scale, it executed a $77 million convertible for an emerging Chinese mid-cap Fu Ji Food, which only listed on the Stock Exchange of Hong Kong in late 2004. At the other end, it led a CB for one of Territory's top credits in early December when Hongkong Land made a rare foray in to the CB market.
Further afield it has completed eight deals from India and one from Indonesia - a country, which has seen practically no issuance since the financial crisis. Indeed, its $200 million exchangeable for Willow Finance was one of the stand-out transactions of the year and a leading indicator of where the more astute houses are making their money. This one deal alone netted JPMorgan more money on a gross fee basis than most other houses made in the whole year.
It goes a long way to balancing competitors' claims that JPM's aggressive attitude means that it ends up warehousing many deals on its own balance sheet.
The deal in question was a $200 million exchangeable for Indonesia's controversial Bakrie group. The latter wanted to bring down its borrowing costs and increase its operation flexibility. At the same time it also wanted to retain near-term upside in the coal cycle by selling shares at a forward date.
JPMorgan put together a deal using its innovative ROSES (Resettable Onward Starting Exchangeable Securities) structure. This allowed the Bakrie group to retain near-term upside as the deal does not become convertible until August 2006 - just over a year after its launch date.
In return for ceding the equity upside, investors were rewarded with a high yield of 9%.
The deal was also collateralized by the family's stake in its listed entity Bumi Resources, but the level of collateralization was less than that attached to a loan which was re-paid with proceeds from the exchangeable.
Much of the credit for JPMorgan's phenomenal franchise can be attributed to one of the firm's star bankers Achintya Mangla - a man whose youthfulness belies his talent.
Best FIG House
Morgan Stanley
If ever there was a shoe in for this award Morgan Stanley was it. It is now the third year running that Matthew Ginsburg and his team have won Best FIG House and they have done so more convincingly in 2005 than ever before.
It is a year that has been dominated by the restructuring and flotation of China Construction Bank (CCB). It forms the centerpiece of Morgan Stanley's FIG year and deservedly so.
The restructuring of the bank and marketing of the IPO were both faultless. CCB was the first of the big four banks to conclude a strategic investment and Morgan Stanley's well thought out structure helped align the interests of Bank of America, CCB and its future public shareholders. The subsequent IPO, which has already been covered extensively in our other write-ups, was the largest ever by a commercial bank. It sailed through the primary markets and has continued to perform well in the secondary despite concerns that it had been overpriced.
Away from CCB, Morgan Stanley has still had an extremely active year and been at the heart of the three big banking markets in Asia - China, Korea and Taiwan. According to the bank's own estimates it has advised on 11 transactions in the M&A space with a total transaction value of $11.8 billion, nearly double that of its nearest competitor.
On the ECM side it has been equally active, with nine transactions under its belt totaling just over $12 billion. In the last two weeks alone, it has raised $1.75 billion for India's ICICI Bank and $200 million for Taiwan's Shin Kong Financial Holding.
The latter country is one where Morgan Stanley really stands out. The consolidation of the Taiwanese financial sector has always promised much and delivered little. This year, a number of potential M&A transactions fell apart.
One that didn't was the $1.5 billion merger of equals between International Bank of Taipei (IBT) and SinoPac Financial Holdings. Morgan Stanley represented IBT, but had to deal with a rival bid for SinoPac from Taishin and a boardroom fight between competing shareholders.
In Korea, Morgan Stanley was also involved in the defining FIG M&A deal of the year - the $3.3 billion sale of Korea First Bank (KFB) to Standard Chartered. The US investment bank advised the government, which held a stake in KFB alongside Newbridge.
It had a more junior role on this transaction as the government was subject to drag along rights, which meant it had to follow Newbridge's lead. However, at a time when the role of foreign private equity firms has become highly politically charged in Korea, Morgan Stanley had a key role to play smoothing the M&A process.
Best GIG House
Merrill Lynch
This award was one of the more difficult to judge because in league table terms it was very close between Merrill and Citi. In ECM and DCM the two firms are ending the year pretty much neck and neck. In M&A Citi has a lead.
But we decided Merrill deserved to scoop the prize because it has completed so many of the year's landmark transactions in the GIG space. A number of them have won awards in our other categories.
In many ways, the firm's new GIG and investment banking head Sheldon Trainor is taking on the mantle of King Coal.
In ECM and DCM the firm's two biggest deals have come from the coal sector, albeit at either ends of the region. From China, Merrill was a bookrunner on the $2.68 billion IPO of Shenhua Energy.
At the time the deal ranked as the world's largest IPO of the year and it was a tough deal to bring to market. A Chinese coal company will never enjoy the same slick image as an oil major, no matter how large, efficient or profitable it is. In the end, Merrill was able to bring the deal at a premium to local comparables such as Yangzhou Coal, but had to settle for a discount to global comps such as Peabody Energy.
A few months later and it was back with a $600 million securitization for Indonesia's IndoCoal. This is a deal, which has also won the category for Best International Securitization and Most Innovative Deal. It is a transaction that has been lauded by all of the bank's competitors - largely because it has established a template for other Indonesian borrowers that need to raise cash, but have credibility issues with investors.
Merrill was back in Indonesia later in the year with a structured and fairly bold pre-IPO exchangeable for speciality chemicals company PT Sulfindo. This is a deal that probably would have not been able to clear the market six months ago and the fact it did stands testament to investors' renewed comfort with the country's risk/reward trade off.
Other stand-out deals in the ECM space include the IPO for Dongfeng Motor, the IPO for Jet Airways and the re-IPO of the Medco group.
In debt Merrill Lynch has also had a fairly interesting year, particularly of late thanks to the successful execution of a $600 million high yield bond for Galaxy Entertainment. Few thought a debut high yield bond from Macau's gaming sector would be a success.
Some DCM bankers suggested the single-B rated credit would be forced to pay up to 12% for its seven non-call four tranche. In the end, the deal came on a far more reasonable yield of 9.875%.
And finally in M&A, Merrill also has a number of interesting transactions under its belt and one award winning one - Hite's $3.373 billion acquisition of Jinro. Merrill advised Hite.
Best TMT House
UBS
Another tough award to judge as UBS, Morgan Stanley and Citigroup have all had a very good TMT year. We finally settled on UBS because it was strong across debt, equity and M&A in both the tech and telco space. This is perhaps not that surprising given the focus devoted by the bank's Asian investment banking co-head Rob Rankin, who is a telecoms banker by training.
In total UBS has acted for about 30 clients in nine markets with transaction volume exceeding more than $15 billion. In the M&A space it was an advisor on two out of the three biggest TMT deals of the year. These included the $1.6 billion merger of CSL and New World PCS and the $1.476 billion acquisition of a 10% stake in Bharti Televentures by the UK's Vodafone.
The former deal was interesting because it removed one more operator from Hong Kong's saturated mobile sector, while the latter acquisition set up an interesting dynamic with SingTel, which has long hoped to increase its stake and take control of Bharti.
Other benchmark M&A deals include Khazanah and Telekom Malaysia's $304 million acquisition of a $24.35% stake in Singapore operator MobileOne and a $230 million acquisition of Philips Mobile Display Systems business by Taiwan's Toppoly.
On the equity side, UBS has been particularly strong. Alongside Morgan Stanley, it has a lock on business from Korean TFT-LCD producer LG Philips LCD and has been a bookrunner on three transactions this year including a $2.2 billion ADR.
It has also done a suite of business in Taiwan during a year when the tech sector has not provided much business. Transactions include a $263 million GDR for Hannstar and a $234 million GDR for Wistron. The Swiss bank was also a bookrunner on Foxconn's landmark listing in Hong Kong back in January. The $432 million IPO represented the first major listing of a Taiwanese company on the HKSE and offered investors exposure to the Hon Hai group company's fast growing activities on Mainland China.
In the telecom space, UBS was also a bookrunner on the largest equity offering from the country this year - Chunghwa Telecom's $3.1 billion follow-on offering. In total, UBS has raised $8.9 billion for Asian TMT companies via 13 equity and equity-linked transactions.
The bank was also a bookrunner on one of the most successful debt offerings of the year in the high yield space - Hanaro Telecom's $500 million bond offering back in January. The transaction garnered a huge order book and underlined the combined appeal of a non-investment grade credit rating and private equity ownership for international bond investors.
Best Loan House
Citigroup
Citi has dominated this category for so many years that it has established itself as the de facto house to beat. And for it to be dislodged from its top spot it is going to require another bank to obliterate Citi in volume terms, as well as in the number of deals and the quality of transactions executed.
There was a little bit of controversy in the league tables this year. Looked at casually, Citi is massively ahead. According to Dealogic's bookrunner league table it has led 55 deals with a value of $11.19 billion, with Standard Chartered in second place with a volume of $6.29 billion (from 69 deals), and HSBC third with $5.78 billion.
However, just over $4 billion of Citi's lead is accounted for by a single sole led deal (the three month letter of credit issued to CNPC in its acquisition of PetroKazakhstan). Rival firms complained the deal was only syndicated to a couple of banks, and that the amount syndicated was only $50 million apiece.
However, after meeting Citi we were shown letters showing the size of commitments from other banks and it was proved to us that over $1 billion was in fact syndicated. The loan itself was a key component of CNPC's bid; but the fact it wasn't drawn down may lead some to question whether it should be given the same weight as drawn loans such as San Miguel's bridge financing.
Citi pointed out that a lot of Hong Kong revolving credits give other banks a similar boost - and similarly don't get drawn. So we looked at a league table where revolving credits and the CNPC deal were excluded and Citi was still ahead by close to $1 billion.
The league table that Citi itself likes to point to is sole bookrunners. It feels that true syndication skills are only demonstrated where a single bookrunner cannot hide behind other banks. Here again, Citi is supreme.
On a sole books basis it has led 27 deals worth $8.59 billion. No other bank has led as many sole transactions and even if you subtract CNPC, it is still well over $2 billion ahead of the nearest competitor.
As a top loan house, Citi can lay claim in 2005 to a good spread of business both geographically and by sector. It has likewise brought a very healthy crop of new issuers to the syndicated loan market, and got involved in some of the more interesting acquisition financings.
Best Local Currency Bond House
Standard Chartered
This has to rank as one of the tougher, more competitive categories this year. Last year's winner, HSBC once again put in a very strong pitch. In absolute terms it remains the biggest volume player, pipping Standard Chartered by just under $300 million ($6.61 billion versus $6.36 billion).
However, it trails Standard Chartered by number of deals (162 versus 189), and more critically from our perspective, Standard Chartered was able to demonstrate that it is ahead in virtually every local currency bond market aside from Hong Kong - where HSBC dominates. It enjoys a particularly strong lead in India and Thailand.
Both have had great years in the local markets, which made this decision extremely tough. HSBC led some highly innovative transactions, many of which won our deals of the year. However, this is a regional house award and after much deliberation we felt this year that Standard Chartered had achieve a more ‘regional' footprint in terms of volume of issuance.
If you look at non-Hong Kong dollar issuance, for example, Standard Chartered's volumes are $3.8 billion versus $1.9 billion for HSBC. This was all client-driven issuance - that is to say, Standard Chartered's volume this year was not pumped up by self-led deals, as it has historically been accused of.
This year it has led a portfolio of major deals that include names such as: HDFC Bank, Cathay Pacific, SingPower, State Bank of India, PTT, Thai Airways, SICCO, SM Prime, and Cagamas. It has demonstrated strong securitization skills, Islamic financing capabilities and has brought debut issuers to the markets such as the Abu Dhabi Commercial Bank, which issued in Singapore dollars.
In Taiwan it received a securities license in August, which should allow it to plug that gap in its bond franchise. In China it is an adviser to CCB on its inaugural RMBS deal; a pilot transaction that will be used to construct China's local currency securitization laws, and shows Standard Chartered to be at the forefront of market development.
All in all it has been a very good year for Standard Chartered. It has certainly come a long way since first entering the fixed income markets just seven years ago.
Best Securitization House
Standard Chartered
Given that the Asian securitization market is still in its infancy, this award will always be more than just a reflection of market share and league table dominance. The best securitization house is one, which is also committed to promoting securitization in new markets with new asset classes. Bearing this in mind, it was a close call between Citigroup, HSBC and Standard Chartered.
All three were leaders among their own respective league tables and each had a strong diversity in both geographic and currency spread through out the region.
HSBC brought deals from Hong Kong, India, Malaysia, Singapore, South Korea, Taiwan, and Thailand. Citigroup, on the other hand, missed out in Hong Kong and Singapore, but brought the first true sale rated securitization from Sri Lanka to market with HDFC Bank.
However, we felt it was Standard Chartered that had pushed the market that little bit further. Matching HSBC for geographical experience, the bank would go one country further after closing the groundbreaking pilot RMBS deal for China Construction Bank in mid December.
After 18 months of unheralded leg work, Standard Chartered brought the first of two pilot securitization transactions approved by the Chinese regulators under the countries newly established securitization framework. The significance of this deal is hard to understate and many hope the success of the CCB RMBS will result in a proliferation of legal and regulatory structures that will solidify and smooth the progress of consistent securitization market in the PRC.
Despite only entering the market just over three years ago, Standard Chartered's Asian asset securitization team has built up and impressive and pioneering portfolio of deals. This year these have included: Sicco, Thailand's first auto ABS transaction; the bank's own Start CLO, the largest ever cross-border securitization and; Cagamas 1, the first Ringgit MBS transaction to achieve off-shore distribution.
Best Project Finance House
Calyon
When we looked at the project finance pitches this year, we were impressed by Calyon's deal roster, which was diverse both sectorally and geographically. Calyon has a project finance portfolio in Asia of $1.8 billion and has done deals in industry & mining, infrastructure, oil & gas, and power. Its portfolio breaks down into 12 Asian countries.
Its key deals include Nam Theun 2 (see Best Project Finance Deal), Pusan New Port - a US dollar and won funded deal, closed in three months - Glow IPP, cable deals in Korea for C&M, Hanaro and Taekwang, the Keppel Merlimau greenfield power project, and Ratchaburi Power Company.
By the end of the year it should have completed a total of 20 transactions as an arranger. In addition it has had advisory mandates for Uijongbu LRT in Korea, Block 8 Oil financing for Sinopec into Angola and Shanghai Shibei Water (being sold to New World and Suez Environment).
Calyon has 18 professionals dedicated to project finance in Hong Kong and Singapore, and is looking to expand the team further - a reflection, perhaps, that project finance is very much a growth business in Asia once again.
Best Mid-Cap House
BNP Paribas Peregrine
Best Mid-Cap House is an award that BNPPP has almost made its own. The bank specializes in Chinese mid-cap plays and has developed an enviable track-record for bringing best of breed companies particularly in the consumer sector.
Equally it has built up a reputation for sensibly valuing deals that provide some aftermarket performance for investors. Its stand-out offering in 2005 was probably a $240 million IPO for Parkson Retail in November.
This is a deal, which was shortlisted for our category Best Mid-Cap Deal and only narrowly lost out to a deal from Korea.
Parkson was every banker's dream IPO. It was also well structured and had a headline grabbing investment by Khazanah, the Malaysian government's investment arm.
The IPO represented the listing of the Chinese retail arm of Malaysia's Lion group. The listco comprised a portfolio of upmarket department stores and the lead was able to pitch the deal towards the higher end of the Chinese consumer sector's valuation range, pricing it on at19.7 times 2005 earnings.
Getting IPO's done in Hong Kong this year has not been that easy as the market was extremely sluggish during the first half of the year and has not been one of the region's best performers overall.
However, it began to pick up momentum again during the fourth quarter following successful IPO's for China Construction Bank and Link Reit. This has prompted BNPPP to begin unloading its pipeline and the bank has bought a string of deals to market over the past two months.
These include a roughly $150 million IPO for Xiamen Port, a $130 million IPO for OEM silk manufacturer China Ting and a $101 million IPO for knitwear manufacturer Shenzhou International Holdings.
All three deals were well priced, with China Ting rising 6% on its debut in Hong Kong yesterday.
Best Small Cap House
CLSA
This is the second year in a row that CLSA has won this award. It is one of the few truly regional players and balances professional execution with strong aftermarket support. The latter is particularly important given the general lack of research support for small cap stocks and the hurdles this places on their stock market performance.
CLSA, by contrast has produced 562 research reports for small cap companies this year and covers 291 on a regular basis. In the primary market, the bank has also been very active, raising nearly $800 million across seven different markets.
Indeed, its $39 million IPO for Phatra Securities represents one of the few equity deals from Thailand this year. Phatra has the most well known brand name in Thailand's securities industry and unsurprisingly its deal was well received, with the order book closing 10 times covered. The deal has also performed relatively well in the secondary market rising roughly 15% since its listing in May, versus a 6% rise in the SET index.
Another interesting and landmark deal was the $47 million IPO of Pearl Energy in Singapore. The deal represented the first listing of an E&P company on the Singapore Stock Exchange and the lead had to bring investors up a fairly steep learning curve.
They clearly got there pretty quickly, however, as the share price has since soared about 102% above issue price. There has been a similarly strong performance by a second Singaporean IPO for agri-products supply chain manager Olam. This is currently up about 145% year-to-date.
All in all it has been a very rewarding year for CLSA's new South East Asian ECM head Edward Slade and also his regional boss Richard Taylor, who has executed a number of transactions in India where the group has a very strong broking operation.
Key transactions from the Subcontinent include a $40 million GDR for power company CESC and two sub $100 million GDRs for E&P company Videocon Industries.
Best Equity Brokerage
UBS
There aren't many awards that prove so uncontentious as this one. There is clear blue water between UBS and the competition on secondary equity broking, and that fact is a key component of the UBS equity capital markets franchise too. UBS dominates in equity flows in the region, and its research and its research website are a key reason why - since both are excellent.
What is all the more amazing about UBS is its staff continuity. It is the first firm in Asian broking history to have kept its top position for more than two years and not implode.
In fact, UBS has arguably been the top broking house now for almost half a decade. Adding to the mix, it is one of the most proactive houses in China. It is the first foreign firm to buy into a domestic brokerage (Beijing Securities), and is a sign of UBS' desire to localize in what will become one of the biggest equity markets in the world.
