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WEEKLY UPDATE

Activity in the Australian ABS market is picking up, with two deals priced in the past week, and another two due shortly. Last Friday Westpac and SG priced the debut issue for Greater Building Society (GBS). GBS originates A$700m of mortgage loans a year in New South Wales.

Two Australian real estate investment trusts, Mirvac Group and Macquarie ProLogis, raised fresh capital this week, bringing to five the number of such deals so far this year. The latest issues from Australia confirm that the Asia Pacific region continues to outperform the European and US markets in terms of new issuance.

Mitsubishi Tokyo Financial Group (MTFG), Japan's biggest banking group by market capitalisation, has embarked on a global share offer to sell up to ¥412.5bn ($3.45bn) of stock. Most of the transaction will comprise new shares and the entire proceeds will go to MTFG's balance sheet. Excluding issues from government or quasi-privatised companies, the placement is the largest new share offering from Japan to date. It is also the first time in 13 years that any of Japan's largest banks have made a capital increase of new ordinary equity.

While MTFG is on the road to raise as much as ¥412.5bn ($3.45bn), Japan's three other big banking groups are seeking alternative funding sources. Sumitomo Mitsui Financial Group and Mizuho Holdings are trying to sell preference shares to customers, close shareholders or would-be partners. UFJ late last year hived off ¥1tr of dud loans. SMFG was the first to announce efforts to raise fresh capital. In mid-January, Goldman Sachs announced it was buying ¥150.3bn ($1.27bn) of new convertible preference shares in the bank.

The Republic of the Philippines struggled to become the first Asian sovereign to launch a seven year benchmark in euros when it priced a Eu300m transaction yesterday (Thursday). A combination of investor concerns about possible military action against Iraq and market volatility in Asian bond markets after Korea's A3 rating was assigned a negative outlook by Moody's conspired to push out spreads on the republic's dollar bonds by 15bp this week.

Sinotrans' offer was priced on Monday at HK$2.19 per share - above even the most optimistic expectations of last week. China's latest privatisation and the largest IPO in the world this year raised HK$3.4bn before the virtually automatic greenshoe exercise that will raise another HK$510m.

Hutchison Whampoa this week made a lightning return to the dollar bond market with a $1.5bn 10 year issue executed in 15 hours. But while the speed of execution was breathtaking, rival bankers claimed the bond fell foul of market volatility and that the borrower had to pay up to get it away.

The Government Housing Loan Corp (GHLC), Japan's largest residential mortgage lender, last week launched a ¥150bn domestic securitisation of residential mortgages via bookrunner Goldman Sachs and joint leads Daiwa Securities SMBC and Mizuho Securities. The single bond, rated triple-A by Standard & Poor's and local agency Rating & Investment Information, was priced at 59bp over 0.8% 20/12/2013 JGB. The notes have a legal maturity in February 2038. The bonds were sold to life insurance companies and small banks.

China Chinese central bank governor Zhou Xiaochuan this week said China's GDP grew by 8% in 2002. The figure was in line with preliminary estimates.

Snowy Hydro launched its keenly awaited A$500m three tranche deal yesterday (Thursday), with bankers hoping that it will finally open the floodgates for primary market issuance after a disappointingly quiet January. The hydroelectricity generator is to issue fixed and floating rate notes with seven and 10 year tenors, which are wrapped by XL Capital Assurance to give an AAA rating.

TradeWeb, the internet trading platform for fixed income instruments, added EuroCP to the platform on February 3 and nearly Eu1bn of EuroCP has been traded since launch. "We are pleased with how the first week of trading has gone, but we are realistic that we have a long way to go," said Lee Olesky, president of TradeWeb Group and chief executive of TradeWeb Europe. "All the feedback we have received on the buyside has been positive and the leading dealers are all anxious to support us. While I try not to make predictions, the first week has been very much in line with our expectations."