Weekly Market Wrap [Nov 14, 2008]:

Asiamoney rounds up the major financial news stories in the media over the past week across Asia.

  • 01 Oct 2008
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China unveils a fiscal stimulus package before revealing a sharp slowdown in industrial growth, while Citic Pacific is rescued from bad FX bets by its state-owned parent. Pakistan raises its key interest rate two percentage points as inflation hits 25%, Japan eases capital accounting rules and Las Vegas Sands announces more than 9,000 job cuts in Macau.


The government announced a new fiscal stimulus plan featuring Rmb4 trillion (US$586 billion) of investment on infrastructure and social welfare over the next two years. The package aims to support budget housing and rural and key infrastructure construction. Officials also pledged to expand a VAT scheme that is expected to cut Rmb120 billion from company tax payments nationwide.

Opting to give good news before bad, Beijing subsequently revealed that industrial growth during October had hit a seven-year low. It said industrial production had grown 8.2% in the month, compared with an 11.4% rise just a month earlier. Steel production dropped 17% year-on-year.

China International Trust & Investment Corp. said it would inject US$1.5 billion into its Hong Kong-listed arm Citic Pacific via convertible bonds, to help cover losses stemming from disastrous foreign exchange contracts that could cost US$2 billion. The convertible bonds will double the state-owned parent's stake in Citic Pacific to 57%. Citic Pacific had agreed to buy up to A$9 billion at an average rate of US$1 to A$0.87 until October 2010. But since peaking in July, the Australian dollar's value versus the greenback has slumped about 30% to trade at US$1 to A$0.65 by the end of this week.

The government announced a scheme to provide HK$10 billion (US$1.3 billion) in loans for small and medium-sized businesses (SMEs). It will allow firms to borrow a maximum of HK$1 million from financial institutions, of which up to HK$500,000 can be used as revolving credit. It is hoped to provide relief to SMEs during the credit crunch and act as an incentive for banks to resume lending.

Hutchison Telecommunications International said it would pay shareholders a cash dividend of HK$7 per share, amounting to HK$33.7 billion, next month. The group booked a US$8.9 billion profit from the sale of its Indian arm Hutchison Essar last year.

Truck manufacturers were being forced to suspend vehicle production owing to falling demand. Tata Motors shut one of its plants for three days and said it planned to suspend production at two more. Rival Ashok Leyland said it would cut production to three days a week for a month. Separately, domestic car sales slumped 6.6% year-on-year to 98,900 in October.

Tata Group chairman Ratan Tata ordered a review of all parts of the conglomerate's cash flow and business plans. The group was forced to prop up a rights issue by its Tata Motors subsidiary this month after its US$2.3 billion acquisition of Jaguar and Land Rover this year. Last year Tata Steel, another affiliate, bought Anglo-Dutch steel group Corus for US$13.7 billion in India's biggest foreign takeover.

Japanese mobile phone firm NTT DoCoMo agreed to pay about US$2.7 billion for a 26% stake in Tata Teleservices. The deal shows that DoCoMo is striving to compete head-to-head with rivals such as Vodafone and Telenor, both of which have Indian subsidiaries.

The government eased capital accounting rules for banks to support loan-making. It will allow them to count some tradeable securities at face value, rather than mark-to-market. This will take effect from the current quarter until March 2012. Banks operating solely in Japan will also be exempted from marking down the value of stocks. However, securitised debt will continue to be accounted for at market prices.

Shinsei Bank CEO Thierry Porte quit on the back of large losses related to the September collapse of Lehman Brothers. He will be succeeded by the firm's 79-year-old chairman, Masamoto Yashiro. In the fiscal year to March 31, 2008, Shinsei had ¥29 billion (US$299 million) of losses related to US mortgage securities. It also had ¥38 billion exposure to Lehman (see story on asiamoney.com).

Mizuho Financial Group said it would raise up to ¥300 billion in preferred shares after reporting a ¥38.4 billion net loss for the second quarter. Japan's second largest bank invested US$1.2 billion in Merrill Lynch this year, but Tokyo's stock market has lost 46% since the beginning of the year.

Chief executive Edmund Ho said the government would not allow casinos in the world's largest gambling market to go bust. Although he said he did not expect any of the territory's six licensed operators to fold, he stressed that the government would step in if necessary. He also unveiled a P$10.2 billion (US$1.27 billion) economic stimulus package, including investment in public housing and infrastructure.

Las Vegas Sands announced that more than 9,000 workers would lose their jobs from its Macau construction site. The US casino operator has suspended development projects including four hotels in the Cotai Strip for up to six months. The under-pressure firm said it had raised US$2.14 billion to fund operations and was working with banks to arrange project financing.

The business-friendly conservative National Party swept to power in November 8 polls, ending nearly a decade in power for Helen Clark's centre-left Labour Party. National Party leader John Key, a former Merrill Lynch banker, said he would seek to form a coalition government.

The central bank raised its key interest rate by two percentage points to 15% to temper inflation, which at 25% is running at a near three-decade high. The country is reeling under an acute balance-of-payments crisis. The rate hike could signal that Pakistan is edging closer to an economic rescue package from the International Monetary Fund, which would have insisted on it raising rates to receive a bail-out.

The central bank cut reserve requirements from 10% to 8% to swell liquidity and opened a window to November 14, during which banks could move bond holdings around their books to avoid mark-to-market losses.

The central bank cut its key interest rate for the fourth time in less than two months after the island posted its biggest decline in exports in almost four years. It cut the benchmark discount rate 25 basis points to 2.75%, reduced the secured loans rate to 3.125% and cut the unsecured loans rate to 5%. Exports dropped 8.3% year-on-year in October to US$20.81 billion.

Former president Chen Shui-bian was detained on suspicion of corruption and embezzlement during his eight years in power. Chen ruled from 2000 to May this year before stepping down. It is alleged he embezzled NT$14.8 million (US$447,000) from the government.

Former Thai prime minister Thaksin Shinawatra began looking for a new home base after British authorities revoked his tourist visa. The billionaire sought refuge in England after he was charged with corruption by Thai authorities this year dating to his time in office. He was subsequently found guilty of breaking conflict-of-interest laws over a property deal by his wife, Potjaman, and sentenced to two years in prison. Thailand's attorney-general has said he will seek Thaksin's extradition.

Sources: Financial Times; Wall Street Journal;South ChinaMorning Post.

  • 01 Oct 2008

Bookrunners of International Emerging Market DCM

Rank Lead Manager Amount $m No of issues Share %
  • Last updated
  • Today
1 Citi 8,935.41 24 14.02%
2 HSBC 7,859.72 26 12.33%
3 Deutsche Bank 7,109.78 16 11.15%
4 JPMorgan 4,850.50 14 7.61%
5 Standard Chartered Bank 3,055.20 19 4.79%

Bookrunners of LatAm Emerging Market DCM

Rank Lead Manager Amount $m No of issues Share %
  • Last updated
  • Today
1 Citi 4,285.53 5 18.23%
2 Deutsche Bank 3,977.43 2 16.92%
3 HSBC 3,768.59 4 16.03%
4 JPMorgan 2,812.07 8 11.96%
5 Bank of America Merrill Lynch 1,803.06 7 7.67%

Bookrunners of CEEMEA International Bonds

Rank Lead Manager Amount $m No of issues Share %
  • Last updated
  • Today
1 Citi 3,236.25 7 20.59%
2 HSBC 2,253.75 3 14.34%
3 Deutsche Bank 1,703.96 4 10.84%
4 Standard Chartered Bank 1,518.77 3 9.66%
5 JPMorgan 1,341.27 2 8.53%

EMEA M&A Revenue

Rank Lead Manager Amount $m No of issues Share %
  • Last updated
  • 02 May 2016
1 JPMorgan 195.08 50 10.55%
2 Goldman Sachs 162.26 37 8.77%
3 Morgan Stanley 141.22 46 7.64%
4 Bank of America Merrill Lynch 114.20 33 6.18%
5 Citi 95.36 35 5.16%

Bookrunners of Central and Eastern Europe: Loans

Rank Lead Manager Amount $m No of issues Share %
  • Last updated
  • Today
1 ING 3,668.64 29 9.07%
2 UniCredit 3,440.98 25 8.50%
3 Sumitomo Mitsui Financial Group 3,156.55 13 7.80%
4 Credit Suisse 2,801.35 8 6.92%
5 SG Corporate & Investment Banking 2,478.18 21 6.12%

Bookrunners of India DCM

Rank Lead Manager Amount $m No of issues Share %
  • Last updated
  • Today
1 Standard Chartered Bank 126.67 2 7.81%
2 Sumitomo Mitsui Financial Group 81.25 1 5.01%
2 SG Corporate & Investment Banking 81.25 1 5.01%
2 Morgan Stanley 81.25 1 5.01%
2 JPMorgan 81.25 1 5.01%