The fortunes of Asia’s financial markets come to the fore when Asiamoney meets bankers to make its decision on what deals and houses were the best for the previous twelve months.
At the end of last year, talk was of size and volume. The Hong Kong and Shanghai bourses witnessed the jumbo initial public offerings (IPOs) of AIA and Agricultural Bank of China. The recovery was in full swing, banks were expanding headcounts and Asia was leading the charge.
And while this region remains in the spotlight for its growth, just one year later it feels like the rest of the global economy is crumbling around it and threatening to take it down too.
The focus on size and volume has been replaced with the patter of caution, client management and good execution in choppy markets.
“We’ve been very disciplined about our balance sheet ... we’ve been pricing deals to sell in the market,” said one senior syndicate banker about his bank’s approach to loan origination and syndication. His bank pitched creative structuring and prudence as selling points above sheer volume.
Good execution has been highly valued this time around. Banks’ approach to awards pitching can be split between those pitching deals priced before eurozone-related volatility hit in August and those pitching deals priced after.
Even those hawking pre-August deals noted that Arab uprisings, the Japanese earthquake and the US credit downgrade made for some hair-raising times on the road. But banks pitching post-August deals sounded proudest when regaling Asiamoney with tales of pricing successfully in windows that remained open only a day or two.
Two deals that Asiamoney has heard pitches for and that are going head to head in the best investment grade category are a good example of this. Bond deals from Export Import Bank of Korea (Kexim) and Korea National Oil Corporation (KNOC) came to US dollar markets within weeks of each other.
But one thing that all houses seem to agree upon is the continued resilience of dim sum bonds - denominated in renminbi but sold in Hong Kong (CNH) - in the face of virtual shutdown everywhere else.
And as awards pitches roll into their second week, Asiamoney does not doubt that “Best CNH house” will be one informal category banks will be fighting tooth and nail over.