Asian markets will look very different once the fire-sale of distressed assets is over and the dust settles. While shrunken in US dollar terms, a world of floating currencies and open capital markets presages huge opportunity for the banks and brokers trading them.
For some, at least.
Yesterday, that quintessential Asian player Jardine Fleming, with its 4,000 or so staff, reported a derisory US$14 million profit for last year. Increasingly, the days of bloated agency brokers offering savvy research and a local route map look numbered as a brutal logic reshapes the global finance industry.
US firms stumbled into Asia during the past decade. While the region offered little more than brokerage commissions and underwriting fees, the market was sewn up by the old colonials. Now, corporate Asia is on the chopping block; takeovers, distressed debt sales and ancillary capital markets transactions will follow.
After accepting years of losses building European market share, US firms are finally getting serious about Asia. The likes of Merrill Lynch will do you a $200 million regional programme trade effectively for free.
Against that muscle in a market where information is so widely dispersed, the competitive edge is price and distribution capacity.
Jardine Fleming looks especially unprepared to respond with legions of expatriates across the region drawing fat packages. Others face the same dilemma.
