Best Asian Investment Bank
Haitong International Securities
One of the biggest criticisms from international banks against their Chinese peers is that they focus purely on clients from their home market. For the most part, there is good reason for this assessment. But Haitong International Securities, which has made efforts to broaden its reach to the rest of Asia, offers a clear exception.
Expanding outside one’s home market is never easy, especially in the ultra-competitive landscape investment banks face at the moment. Southeast Asia tends to be dominated by regional houses like DBS and CIMB, while Indian banks have a big foothold in their country. In such an environment, Haitong has managed to snag deals in both Singapore and India, and has bulked up its capabilities in those regions.
In India, for instance, Haitong International Singapore brought Haitong Securities India under its umbrella at the end of 2016 by acquiring the unit from Portuguese affiliate Haitong Bank, formerly known as Banco Espírito Santo de Investimento. Haitong India’s principal activities are institutional stock broking and investment banking.
On the primary market side, that streamlining started to pay off. Haitong was one of the bookrunners on HDFC Standard Life Insurance’s chunky Rp86.9bn ($1.3bn) IPO in early November 2017 and on Central Depositary Services’ Rp5.2bn flotation in June.
Singapore also provided Haitong with opportunities, as the bank bagged six licenses to carry out financial services in the city-state. In December 2016, it acquired its Singapore subsidiary as part of a restructuring. The apparent impact was immediate. Haitong was one of the bookrunners and underwriters on Dasin Retail Trust’s S$146m ($102m) Singapore Exchange IPO in January 2017 — the first mainboard listing of the year, and Haitong’s first ever IPO on the bourse.
Hong Kong-based Haitong has also leveraged on its product development and sales bases in Japan, Singapore and India, as well as its platforms in Europe and the US, successfully when it comes to originating and distributing deals.
The impressive growth of its franchise is starting to reflect in the league tables. In the G3 high yield bond bookrunner tables for Asia ex-Japan during the awards period, Haitong ranked first with credit of $3.9bn, running 36 transactions for a 7.92% market share. In comparison, during the same time last year, it did not feature among the top 10 bookrunners, according to Dealogic.
The boost also had a clear affect on DCM revenues, with Haitong raking in $125.65m during the awards period. That gave it a number three ranking in Asia ex-Japan DCM by revenue, behind only China Securities Co and Citic Securities, according to Dealogic. When it came to investment banking revenues in Asia ex-Japan for the full year 2017, Haitong ranked ninth for $325m and a 2.9% market share.
In the Asia ex-Japan ECM bookrunner tables, meanwhile, Haitong placed ninth with a 3% market share, a slide year-on-year from the fifth ranking it held for a 3.88% market share. But it made a mark in the region’s IPO sponsor league table, breaking into the top 10.
On the M&A front too, the firm has made great strides, working as a financial adviser for Oceanwide Holdings International Financial Development Co’s acquisition of Quam, and Leyou Technologies Holdings’ purchase of a substantial stake in a number of video game companies, to name just a few.
Credit needs to go to the firm’s experienced senior staff. Haitong International has been firing on all cylinders thanks in part to the stability and consistency they provide to the firm’s operations. The majority of Haitong’s heads of businesses — including Chen Yi, managing director and head of global capital markets, Sean Huang, global head of corporate finance, and Kenneth Ho, managing director, ECM — have all been with the bank for more than five years.
For slowly but surely making headways outside of its Hong Kong/China base through solid integration of its various businesses, Haitong is GlobalCapital Asia’s Best Asian Investment Bank for 2017.
Best Investment Bank
One way banks can impress is by identifying trends early on and positioning themselves to lead the charge in the market. And if they can pull off highly lucrative deals in the process, then all the more better. Credit Suisse did exactly that across all the different asset classes in Asia, making it GlobalCapital Asia’s Investment Bank of 2017.
Credit Suisse gave rival banks a run for their money in every market we cover during the awards period, taking full advantage of its unique structure. The bank’s Asia Pacific division, helmed by chief executive Helman Sitohang, operates on a standalone basis — allowing the region’s management to take decisions rapidly and adeptly.
This is always critical, but is even more so when it comes to high profile event-driven transactions that require quick decisions. One example is investment manager I Squared Capital’s HK$14.497bn ($1.9bn) acquisition of Hutchison Global Communications. Credit Suisse was the sole financial adviser to I Squared and a joint underwriter on the HK$7.137bn financing package put together to support the bidder.
It was a coup for Credit Suisse, especially since few bankers expected I Squared to emerge victorious. But it did, mainly because it didn’t require regulatory approval for its purchase to go ahead. In this case, the Swiss bank was at the right place at the right time, and taking a punt on the more risky bidder paid off.
Credit Suisse, whose Asia Pacific investment banking and capital markets unit is jointly helmed by Mervyn Chow and Edwin Low, also worked on the landmark $44.6bn acquisition by ChemChina of Swiss seed-maker Syngenta.
Strong DCM house
The bank’s focus was of course not limited to Hong Kong and China. It has a presence across much of Asia, setting it apart from its peers.
On the debt front, Credit Suisse — winner also of our Best High Yield Bond House — outdid itself. It led trades in multiple countries, including China, Singapore, India, Indonesia, Hong Kong, Mongolia and Malaysia. When companies had specific needs and a complicated story, Credit Suisse was often the go-to bank.
Among the highlights were jumbo high yield offerings by Kaisa Group Holdings, which raised a $3.45bn multi-tranche bond, and China Evergrande Group, which netted $6.6bn.
Credit Suisse also had to think outside the box when trying to find a solution for Indonesia’s Gajah Tunggal, whose looming refinancing needs had put pressure on its ratings. But with a loan-plus-bond combo, the company was able to deleverage and reduce its future refinancing risks. This deal reflected Credit Suisse’s strong country and product coverage.
The bank was also a bookrunner on Indian firm Azure Power Energy’s $500m green bond, our Best High Yield Bond of 2017.
Bankers at the firm are quick to point out Credit Suisse’s pillars — geographic diversity and product diversity, which help to capture the right themes and focus on marquee deals. This is made possible in many ways due to the close collaboration between the investment banking and private banking divisions. The bank’s wealth management and connected business (WM&C) combines its activities in wealth management with its financing, underwriting and advisory activities, a boon when it comes to originating and distributing deals for its private wealth clients.
For instance, net revenues in Asia Pacific WM&C rose to Sfr1.7bn ($1.74bn) for the nine months ending September 2017, a 26% increase year-on-year. Income before taxes jumped 74% to Sfr570m, of which Sfr428m was thanks to the private banking division, according to financial reports from the bank.
While bankers within the investment bank are adamant they don’t rely on the private bank, the integration certainly helps bring the latter’s clients to the international capital markets.
In the Asia Pacific ex-Japan investment banking revenue rankings for full year 2017, Credit Suisse impressed, ranking first with $458m in revenues and a 3.5% market share, according to Dealogic. For Asia ex-Japan, it came in fourth — a big uptick from the 12th ranking in 2016. For China investment banking, Credit Suisse and Morgan Stanley were the only non-Chinese firms to feature in the top 10 for revenues, with the former ranking 10th and the latter seventh.
On the loan syndications front, Credit Suisse had a stellar year and was involved in two of GlobalCapital Asia’s winning loans of the year.
In the G3 syndicated loans bookrunner league table for Asia ex-Japan, it ranked seventh during the awards period, with credit for 23 deals worth $3.5bn — something that even bankers at the firm said was surprising. It did not place within the top 10 during the same periods the previous two years, shows Dealogic.
Its performance was particularly strong in G3 leveraged and high yield syndicated loans, with Credit Suisse nabbing the second position on the bookrunner league table behind Bank of China — a boost from the fifth position a year earlier.
In China, the Swiss firm arranged loans for well-known names such as Huarong Investment Stock Corp and a unit of Greenland Holding Group. Elsewhere, it arranged a high profile deal for a consortium comprising Indonesia’s Star Energy Group Holdings, Star Energy Geothermal, Philippine conglomerate Ayala Corp and the Electricity Generating Authority of Thailand for their purchase of two geothermal fields in Indonesia from Chevron.
Credit Suisse was a financial adviser to the consortium, and along with DBS and Maybank, put together a $660m two-tranche fundraising for the acquisition. The whole debt package equaled $1.85bn, marking the largest corporate loan financing from the country — and is an example of a key entrepreneurial client for Credit Suisse.
It’s also worth noting that a huge chunk of loan activity for Credit Suisse comes from the private side of its business, which is not reflected in the league tables.
The bank’s strength in equity capital markets was unrivalled too, making it GlobalCapital Asia’s ECM House of 2017. It led the way in technology IPOs in Hong Kong and the US — executing many deals for Tencent Holdings’ related entities during the awards period — a big theme of the year. The Swiss firm was one of four sponsors on our Best IPO and ECM Deal: ZhongAn Online P&C Insurance Co’s HK$13.7bn Hong Kong float.
In southeast Asia, it helmed deals for the likes of Sarana Menara Nusantara and Chandra Asri in Indonesia, while also working on many deals in the Philippines, Thailand, Malaysia and Singapore.
Its presence in frontier markets was laudable. It worked on the landmark IPO for Vincom Retail in Vietnam — considered the first true international listing in the country and featuring an innovative structure.
On the loans front, it continued its relationship with the Pakistan government, and this year also worked on a dollar loan for Pakistan Water and Power Development Authority, the first corporate loan in the country to carry partial guarantees from the World Bank’s International Development Association and the Ministry of Finance.
Needless to say, Credit Suisse’s successes across Asia were no accident. They were the culmination of efforts taken over the past couple of years to become a profit-making franchise, in good times and bad. For dominating the region’s capital markets in 2017, the firm is a well-deserving winner of our award for Best Investment Bank.