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Sean Kennedy

HSBC Markets recaptured top spot in the Hong Kong dollar debt market in the September quarter, arranging 47 issues worth a total of $9.09 billion for the year, taking a market share of almost 24 per cent.

  Standard Chartered Capital Markets, number one for fixed and floating rate issues in the June quarter, slipped to second place with four issues worth a total $5.4 billion, according to league tables published by Asian debt markets newsletter Basis Point.

  Third was Societe Generale Asia, with $3.65 billion in issues, followed by Schroders Asia, with $3.02 billion, and Sakura Finance Asia, with $1.57 billion.

  In the floating-rate market, HSBC Markets was top, with seven issues worth $6.3 billion. Standard Chartered Capital Markets was in second place with four issues worth $5.4 billion, and Societe Generale Asia in third place with $2.75 billion.

  Fourth in the floating-rate table was Schroders Asia, with $2.57 billion, followed by Sakura Finance Asia, with $1.57 billion.

  In the fixed-rate market, HSBC Markets again dominated, with a total of $2.79 billion, with Union Bank of Switzerland (UBS) in second place with $1 billion.

  Third in the fixed-rate league table was Societe Generale Asia with a total of $900 million, followed by Oakreed Financial Services with $825 million.

  The Hong Kong Monetary Authority was fifth with $500 million - since January this year, the authority has been the arranging agent for a Hong Kong dollar note-issuance facility for the Mass Transit Railway Corp.

  HSBC Markets' Andrew Fung said his company had gained the number one spot in the floating-rate market helped by a $1.2 billion floating-rate certificate of deposit (FRCD) issue it arranged for Bank of Tokyo International (Hong Kong) in August.

  Although floating-rate issues came to nearly $30 billion, the third quarter was 'rather average', with no corporate floating-rate note (FRN) issues, he said.

  'Corporates seemed to turn back to the conventional syndicated loan market,' Mr Fung said.

  'Perhaps most of the funding exercises are project-based, which requires flexible cash-flow and corporates with liquidity adjustment facility [LAF] eligible ratings have used the FRN market already.'   An FRCD is an issue of debt securities by a bank, in which investors in the securities are paid a floating rate of interest.

  FRNs are similar to FRCDs, but are generally issued by non-banks, and have a 100 per cent risk weighting, against FRCDs which generally have a lower risk weighting of 20 per cent.

  The Bank of Tokyo was the first Japanese bank to qualify for the LAF.

   LAF eligibility makes FRCDs or FRNs more desirable because holders can engage in repurchase deals with the authority.

  This means they can sell the debt securities to it after agreeing to buy them back at set price and date, allowing the investor more flexibility in managing liquidity.

  Paul Smith of UBS, the second-biggest arranger of fixed-rate Hong Kong dollar issues, said market conditions in the September quarter were better than at the same time last year.

  Brian Yiu, UBS executive director of debt capital markets, said the market tended to expect an easing in US interest rates late this year or early 1996.



HSBC Markets recaptures top spot