Asia Q1 ECM slowest in four years
Equities league tables Follow-ons come back but IPOs need more timeBY FIONA LAU, S ANURADHA,
CANDY CHAN, KAREN TIANAsia-Pacific equity issuance
posted its slowest first quarter
in four years as the coronavirus
pandemic reined in dealmaking
across the region.
Equity and equity-linked
issues in Asia-Pacific, excluding
Japan, totalled US$43.4bn in the
first three months, down 13%
from US$49.8bn a year earlier,
according to Refinitiv data.
CICC led the league table,
having managed 21 deals
totalling US$3.7bn, followed by
China Securities on US$3.65bn
and Morgan Stanley with
US$3.6bn.
Big deals included the
US$4.4bn Shanghai IPO of
Beijing-Shanghai High Speed
Railway, a US$2bn qualified
institutional placement and
US$1bn convertible bond from
Bharti Airtel, a US$1.67bn
A-share private placement by
ZTE and the US$1.4bn IPO ofSBI Cards & Payment Services.
Except for SBI Cards, the
deals were completed before
the full coronavirus outbreak.
Bankers say it is hard to
estimate when global markets
will recover given that the
pandemic is unprecedented.
Issuers and vendors, however,
are keen to tap the markets
whenever there is a window
to raise funds to withstand the
crisis.
Last week, primary and
secondary follow-on offerings
raised a combined US$2.35bn
in Asia Pacific (See News),
riding on the market rebound.
The IPO market’s recovery
is expected to take longer,
however.
“IPOs will be the last to come
back because of the longevity
of getting them done and the
other opportunities in the
marketplace,” said Aaron Arth,
head of the financing group
for Asia ex-Japan at Goldman
Sachs.A-SHARES DOMINANT
Issuers from China accounted for
the bulk of the activity, raising
US$27.9bn or 64% of the deals.
An active A-share market,
even after the outbreak, helped
CICC top the China equity and
equity-linked league table,
followed by China Securities and
Citic Securities.
Shanghai was the world’s
most active IPO market in the
first quarter with 33 companies
raising a combined US$7.3bn,
the first time it has topped the
charts since 2017, thanks to the
jumbo float of Beijing-Shanghai
High Speed Railway and a spate
of Star board IPOs.
Compared with the
international financial markets,
A-share markets have been
relatively stable during the
pandemic after Chinese
regulators implemented a series
of measures to support the
economy and markets. The CSI
300 Index fell 8% in February
and March while the Hang SengIndex was down 10% and the
S&P 500 Index plunged 20% over
the same period.
In contrast to the global
financial crisis of 2008, China
has not shut the IPO market
this time around and relaxed
follow-on rules to help
companies raise funds. It is
also considering lowering the
threshold for convertible bond
offerings.
In February and March, the
China Securities Regulatory
Commission approved 18 IPOs,
21 CBs and two rights issues.
Domestic bankers expect
A-share issuance to stay active in
the second quarter.
“Fundraising was slightly
affected in the first quarter,” said
a Shanghai-based ECM banker.
“However, the situation has
clearly improved recently and we
expect domestic offerings will
return to normal in the second
quarter.”OTHER MARKETS
India was the second most
active market with issuance
totalling US$5.9bn, up 60% from
a year earlier. Bank of America
topped that league table.
“We were confidently
cruising towards the US$30bn
mark (the market’s forecast
volume for 2020) when the
coronavirus hit us. Now we
are reconciled to a first half
shutdown,” a Mumbai-based
ECM banker said.
Bankers expect the second
half to feature QIPs from highly
geared property, infrastructure
and finance companies and
blocks from shareholders who
may be facing cashflow issues.
Australia registered volumes
of around A$6.1bn (US$3.7bn)
in the first quarter, up 69%
from A$3.6bn a year earlier,
mainly because of a last-minute
boost from a A$1.07bn block in
supermarkets operator Coles
Group and a A$880m placement
from hearing implants
manufacturer Cochlear at the
end of March. League tables
12 International Financing Review Asia April 4 2020Top bookrunners of global common
stock Asia Pacific (ex-Japan)
1/1/20 – 31/3/
Amount
Name Issues US$(m) %
1 China Sec 8 3,148.9 8.
2 Morgan Stanley 11 3,104.2 8.
3 CICC 18 3,001.0 8.
4 Citic 8 2,135.9 5.
5 Goldman Sachs 13 1,812.8 5.
6 UBS 13 1,784.7 4.
7 Bofa Sec 8 1,433.7 4.
8 HSBC 9 1,275.0 3.
9 JP Morgan 9 1,070.1 3.
10 Citigroup 8 1,056.7 2.
11 Industrial Sec 10 771.8 2.
12 Sinolink Sec 4 770.8 2.
13 Credit Suisse 5 644.5 1.
14 Axis 4 632.3 1.
15 Guotai Junan Sec 12 576.8 1.
16* Bualuang Sec 1 539.7 1.
16* Kasikornbank 1 539.7 1.
16* Phatra Sec 1 539.7 1.
19 Macquarie 4 527.3 1.
20 GF Sec 7 482.3 1.
Total 405 36,243.
Market volume
Proportional credit
Source: Refinitiv data SDC Code: C4aTop bookrunners of global convertible
offering Asia Pacific (ex-Japan)
1/1/20 – 31/3/
Amount
Name Issues US$(m) %
1 Citigroup 3 737.8 7.
2 CICC 3 701.6 7.
3 Citic 4 665.1 7.
4 Huatai Sec 2 502.8 5.
5 China Sec 4 496.1 5.
6 Morgan Stanley 2 487.0 5.
7 JP Morgan 3 425.8 4.
8 Shenwan Hongyuan Sec 2 375.6 4.
9 Bofa Sec 1 372.0 4.
10 Goldman Sachs 2 365.8 3.
11 UBS 2 315.8 3.
12 E Asia Qianhai Sec 1 281.9 3.
13 Credit Suisse 2 265.0 2.
14 Bank of China 1 234.3 2.
15 HSBC 2 225.8 2.
16 Ping An Sec 2 214.6 2.
17 Guotai Junan Sec 2 206.4 2.
18 China Merchants Sec 1 202.0 2.
19* Barclays 1 200.0 2.
19* BNP Paribas 1 200.0 2.
Total 44 9,393.
*Market volume
Proportional credit
Source: Refinitiv data SDC Code: C9bGlobal equity and equity-related
Asia Pacific incl Australasia, ex Japan
1/1/20 – 31/3/
Amount
Name Issues US$(m) %
1 CICC 21 3,702.6 8.
2 China Sec 12 3,645.0 8.
3 Morgan Stanley 13 3,591.2 8.
4 Citic 12 2,801.0 6.
5 Goldman Sachs 14 1,849.0 4.
6 Citigroup 11 1,794.5 4.
7 Bofa Sec 8 1,562.5 3.
8 HSBC 11 1,500.8 3.
9 JP Morgan 12 1,495.9 3.
10 UBS 12 1,176.6 2.
11 Industrial Sec 13 919.1 2.
12 Credit Suisse 7 909.5 2.
13 Sinolink Sec 6 840.8 1.
14 Guotai Junan Sec 14 783.2 1.
15 E Asia Qianhai Sec 2 663.7 1.
16 Axis 4 632.3 1.
17 Huatai Sec 4 569.6 1.
18* Bualuang Sec 1 539.7 1.
18* Kasikornbank 1 539.7 1.
18* Phatra Sec 1 539.7 1.
Total 374 43,430.
Source: Refinitiv dataB 1 HZVLQGG