News
Asian oversupply pressure builds
Bonds Pipeline in the region swells further, despite shaky conditionsBy FRANCES yOON,
DANIEL STANTONAsian issuers kept up the
frenetic pace in the G3 bond
markets last week, despite
mounting supply pressure at
the end of a record year.
EXPORT-IMPORT BANK OF CHINA
and CHINA STATE CONSTRUCTION
issued the largest deals last
week, while UNION BANK OF
THE PHILIPPINES and VISTA LAND &
LIFESCAPES attracted order books
of US$3.2bn and US$1.7bn
respectively after investors
chased issuers offering higher
premiums.
Signs of oversupply, however,
are building. Some new issues
underperformed, while others
were unable to tighten pricing
as investors turned cautious,
braced for more to come before
the end of the year, especially
from Chinese issuers.
While global primary debt
markets slowed down on
Thursday for the Thanksgiving
holiday, three Chinese issuers
still announced US dollar
and euro-denominated bond
mandates, and another threewere marketing deals on Friday.
That means that issuance will
continue well into December,
even though many fund
managers are reluctant to buy
new issues towards the end of
the year and jeopardise their
early gains.
“We’re trying to maintain
our cash and refrain from
rushing into new issues,especially as there are several
market events that can increase
volatility,” said a Singapore-
based fund manager.
“The Fed, US debt ceiling
issue and tax reforms are
generating uncertainty, so
there is no need to deploy cash
urgently. Secondary markets
do provide some opportunities,
given the recent corrections innew issues which are tightly
priced.”
Last week’s activity from Asia
ex-Japan ex-Australia boosted
this month’s tally to US$22.6bn,
surpassing last November’s
US$18.8bn, according to
Thomson Reuters data.
The region is set to test last
December’s US$12.2bn total,
as a backed-up pipeline willFirst Komodo sighting 06 Beyond demonetisation 06 Late Elion 08
Sell-off hits US fintech listings
Equities Crackdown on consumer lending adds to challenges for LexinFintech’s IPOBy KEN WANG, FIONA LAUChinese online microlender
LEXINFINTECH HOLDINGS faces new
challenges to its proposed
US$500m Nasdaq IPO, after
China’s clampdown on the
micro-loan market triggered
a sell-off in US-listed Chinese
consumer finance firms.
Several newly listed Chinese
companies in the sector saw
their shares plunge in the US
market last week following
reports that Beijing had asked
provincial governments tosuspend approvals of new
internet micro-lenders.
Reuters reported on Tuesday
that a central government
body, tasked with reining in
risks in the online finance
sector had also told local
regulators to restrict approvals
allowing micro-loan firms to
operate outside their region.
Shares of online microlender
Qudian fell as much as 20.3%
at one point on the day, before
regaining ground to close
down 3.8% at US$19.31, thanks
in part to a US$100m share-repurchase programme the
firm announced that day.
It was under more pressure
on Wednesday, however,
tumbling another 16%
following more reports of a
wider crackdown. US markets
were closed on Thursday for
the Thanksgiving holiday.
Qudian last month raised
US$900m from the biggest
Chinese listing in the US in a
year.
Shares of Ppdai also fell
14% last Tuesday, and another
24% on Wednesday. The peer-to-peer online lender raised
US$221m from a NYSE IPO
earlier this month.
Jianpu Technology sank
22.3% in two days. The
company, an online platform
allowing users to search for
financial products, raised
US$180m from a NYSE IPO
earlier this month.
China Rapid Finance
reversed a 20% intraday slump
on Tuesday to close 3.3%
higher, but dropped 6% the
following day.UNCERTAINTY LINGERS
The new wave of volatility
adds to the challenge
for LexinFintech. Its
deal is scheduled to start4 International Financing Review Asia November 25 20171019_04 News.indd 4 24/11/2017 21:53: