Equity capital markets in the Asia-Pacific ex-Japan region shrank for a third consecutive year in 2013, hurt by a downturn in India and slower activity in mainland China. The overall decline contrasts with a rebound in initial public offerings that is stoking optimism for a boom in 2014 as mainland China resumes new listings after a one-year hiatus and markets from Hong Kong to Malaysia get multibillion-dollar deals. People have been scared about the QE3 retreat, interest rates, the fiscal cliff RINGO CHOI, EY The pick-up in activity is key for investment banks in the region as new listings carry much higher fees than follow-ons, block deals, or convertible bonds. After lay-offs and bonus cuts, when some banks even exited the region, the revival would give a much-needed boost to bank revenue. UBS, which has come out on top of Asia-Pacific equity capital market (ECM) league tables for eight of the past nine years, raked in US$220.9 million in estimated fees, buoyed by its strong presence in Southeast Asia. The Swiss bank worked on US$18.4 billion worth of deals, ahead of Goldman Sachs, which managed US$16.2 billion, and Credit Suisse with US$7.4 billion. Goldman Sachs ranked second in ECM fees, earning US$173.8 million, followed by JP Morgan with US$150.3 million. Equity issuance in the region fell 5 per cent to US$163.9 billion, while proceeds from offerings rose 2.3 per cent to US$40.6 billion as a surge in new listings in Australia, New Zealand and Hong Kong helped offset weaker markets in Malaysia and South Korea and the absence of deals in mainland China. Bankers and analysts expect a bumper year in 2014, with large offerings in Hong Kong putting the city at centre-stage for IPOs again. Some of the top deals expected include a US$5.7 billion IPO for the electricity business of Li Ka-shing's Power Assets Holdings; a US$6 billion deal from Chinese meat processor Shuanghui International; and listings from health and beauty products retailer AS Watson and e-commerce giant Alibaba. The resumption of IPOs in Shanghai and Shenzhen next month should provide a much-needed boost to deal volumes in the region, after no activity for over a year on the mainland. The first batch of about 50 firms to list on the mainland in January alone should bring in 44 billion yuan (HK$55.73 billion) in proceeds. Advisory firm EY forecasts some US$23.2 billion worth of IPOs in Hong Kong next year, with some 200 billion yuan of new listings on the mainland, the two main markets in the Asia-Pacific region. "People have been scared about the QE3 retreat, interest rates, the fiscal cliff, and for next year you can see there are not that many topics that will make people so scared," said Ringo Choi, Asia-Pacific IPO leader at EY in Hong Kong, in reference to the quantitative easing programme in the United States.