Mainland leads Asia rush for capital
Expanding firms raise US$11.9b from global stock markets after government lifts share sale ban
Mainland companies accounted for almost 50 per cent of equity fund-raising deals in Asia excluding Japan in the first quarter, compared with just 11 per cent a year earlier, according to data compiled by Thomson Financial.
Buoyed by blockbuster deals such as Ping An Insurance's US$5 billion A-share listing and Industrial Bank's US$2.1 billion initial public offering, mainland firms tapped global stock markets for US$11.9 billion from 36 deals in the year to yesterday.
Mainland firms have become more active in raising funds in the equity market after the government lifted a ban in May last year on share sales, including initial public offerings, in the domestic markets.
Major state-owned enterprises including Industrial and Commercial Bank of China and China Life Insurance tapped the A-share market last year after the ban was lifted.
Thomson Financial said A-share offerings reached US$2.5 billion so far this year, against US$12.7 billion for the whole of last year.
'Other Chinese banks set for IPOs this year are Bank of Beijing and China Citic Bank, among others,' it said.
The surge in funds raised in the mainland markets also helped propel local brokerages' rankings in the region as foreign investment banks, except for a handful with mainland joint ventures, are not allowed to underwrite deals.
A single deal, Industrial Bank's float, was enough to secure second place for Bank of China International and increase its market share to 9.5 per cent from 2.3 per cent a year earlier.
China Galaxy Securities and Citic Securities, joint managers along with Goldman Sachs' joint venture on the Ping An deal, were tied for fourth place.
Goldman was the top-ranked investment bank in the region, managing US$4.4 worth of proceeds from nine equity issues for 20.2 per cent of the market. Morgan Stanley ranked third with 12 deals for 7.8 per cent of the market.
Equity fund-raising deals in Asia, excluding Japan, were unfazed by recent market jitters, rising 68 per cent from a year earlier to a record high of US$25.4 billion.
Soaring follow-on share sales across the region offset slightly reduced volumes from new listings.
Listing proceeds fell 2.6 per cent to US$7.4 billion during the period while follow-on share issues surged 175 per cent to US$14.2 billion. Convertible bonds rose 62 per cent to US$3.8 billion.
Hong Kong firms took a distant second place to mainland firms with US$2.1 billion in funds raised while Taiwan companies followed with US$1.8 billion.
On other fronts, merger and acquisition activity in Asia, excluding Japan, jumped 22.8 per cent to US$69.3 billion.
Indian companies were the favoured target, with 234 deals worth US$25.9 billion, including Vodafone Group's US$18.6 billion takeover of Hutchison Essar.
The mainland ranked second as the value of deals fell 6.5 per cent to US$9.5 billion while their number rose 7.8 per cent to 316.
Hong Kong-domiciled targets resulted in 152 deals worth US$5.6 billion.
In the loan markets, volumes across the region dipped 2.9 per cent to US$15.6 billion and the number of issues fell to 77 from 90 a year earlier.
That includes the largest loan in Asia this year - a US$2.2 term facility signed on Monday by Hong Kong's International Finance Centre.
