Thursday, October 4, 2012

Banking revenues boom in Southeast Asia

 
Investment banking fees taken in Southeast Asia have soared to the highest level on record for the first nine months of the year, according to Dealogic, as bankers flock to the region in search of revenues.

Total investment banking revenue from deals in Southeast Asia reached $1.1bn between January 1 and October 4 – the highest year-to-date level on record. Dealogic began recording fee revenue in the region in 1995.

Banks are responding. The Wall Street Journal reported this morning that JP Morgan has created a new team in the region focusing on debt. The US bank will relocate its Hong Kong-based co-head of high-yield and sovereign debt in Asia, excluding Japan, Simon Page, to Singapore.

Page will assume a new role as head of the Southeast Asian debt capital markets team.
Other banks, including Goldman Sachs, Citigroup and VTB Capital, in addition to established firms such as Nomura and Standard Chartered, have all made hires in the region in recent months.
Citi hired Willard McLane from Morgan Stanley in July to head its corporate and investment-banking division for the Asean – Association of Southeast Asian Nations – group of countries, and Goldman Sachs named Steven Barg as co-head of investment banking for Southeast Asia in July, according to the WSJ.

Standard Chartered appointed Patrick Lee as head of origination and client coverage, and co-head of wholesale banking, for Singapore last month, while Japanese bank Nomura launched a Thailand equity research team in August.

VTB Capital has Roger Suyama as head of Indonesia corporate and investment coverage in August, while Rothschild appointed Peter Wheeler as an executive vice chairman and co-head of its business in Southeast Asia, based in Singapore, in June.

The moves come on the back of a debt issuance boom that has accounted for a significant portion of all fees taken in Southeast Asia so far this year. DCM activity in the region brought in $269m in fees in the first nine months of this year, an 83% increase on the amount raised in the same period in 2011, according to Dealogic.

A $4.2bn bond by the Republic of the Philippines issued in February was the largest bond sold by Southeast Asian issuer this year.

Revenues from equity capital markets activity also increased by 2% to $340m in the first nine months of 2012 when compared to the same period a year earlier. The $3.2bn initial public offering of Felda Global Ventures, a Malaysian palm oil producer, in June, has been the biggest ECM deal in Southeast Asia this year.

Malaysia has been one of the main drivers of the the increase in fees, according to Dealogic. Revenue from the country reached $416m between January 1 and October 4 this year – a year-to-date record and up 46% on a year ago. The country accounts for 36.7% of investment banking fees generated in Southeast Asia.

The top-ranked bank for fees taken in the region so far this year is Malaysia's CIMB. The firm has taken $92m in fees, accounting for an 8% share of the market, according to Dealogic. Maybank Investment Bank is the second-ranked institution with $81m in fees, while Credit Suisse – the top-ranked global bulge-bracket firm in the region – places third with $69m in fees.