Standard Chartered Bank began the year in good form acting as arranger and agent on the Airport Authority's $8.2 billion syndicated loan, the first major financing arrangement for airport projects. The bank has a good knowledge of developments in Asian capital markets. David Jackson, deputy chief executive of investment banking, said there were signs the market was maturing. 'As Asian borrowers obtain ratings, we are starting to see international investors becoming interested in Asian assets,' he said. 'There is a lot of interest about Asia in Europe and the US but there is a lack of knowledge. This will develop in time.' Mr Jackson said about 80 per cent of investors in Asian debt securities were banks. 'We see that falling as fund managers enter the market and as Asia develops. There will be more local pension funds, as in Hong Kong, and they will help build local currency bond markets,' Mr Jackson said. In Hong Kong, eligibility for the Liquidity Adjustment Facility (LAF) and profits tax concessions had boosted demand for some floating rate certificates of deposit (CD) issues. Notable among these was a recent one combining both attractions the investment banking arm handled for Standard Chartered Bank as the borrower. He said the Mandatory Provident Fund would stimulate the fixed-interest market now suffering from the tax treatment of profits earned on investment which discouraged onshore investors. The supportive role of the Hong Kong Monetary Authority helped the territory's capital market develop into the biggest and most accessible in the region outside Japan. Standard Chartered is known for its Asian project finance expertise. It recently handled a US$51-million facility for a foreign water project joint venture in China - Shanghai Bovis Thames Da Chan. It also expects to close a landmark deal, a US$124-million financing for Shanghai Zhadian Power Co, a joint venture between the Shanghai Municipal Electric Power Corp and GE Capital. 'Response on the underwriting side was so strong it will not go to syndication,' he said. Mr Jackson said the swing towards syndicated loans and away from floating rate notes, which had boomed as a fund raising instrument, was partly due to their treatment as trading assets which restricted the amount banks could hold.