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Macroeconomic outlook

Macroeconomic outlook

Macroeconomic outlook

Citibank's victory in our annual global custody poll puts it at the top of three of our annual rankings. Our respondents tell us that whoever wants to win it next year will have to put a lot of hard work in to improving their on-line systems - because right now Asia's clients aren't happy with what's on offer. By Olivia Chow and Robert Law

The South Korean markets breathed a collective sigh of relief on August 15 – the day after Hyundai Group founder Chung Ju-yung announced he would sell two-thirds (some W216 billion) of his 9.2% stake in Hyundai Motor to the group's creditors. He will use the proceeds to bail out the group's cash-strapped construction unit, which is reeling under debts totalling more than W6 trillion. The deal signalled a truce in a nearly month-long battle between Hyundai, the South Korean government, and the group's main creditor banks. During that time the entire South Korean economy has hung in the balance as the Hyundai Group teetered on the brink of collapse.

Macroeconomic outlook

In a year characterized so far by an absence of landmark equity deals in Australia, the success of the A$4 billion NRMA Insurance IPO has proved a fillip for the local market, which has been a strong performer in recent weeks as the country limbers up for the Olympic Games. The issue achieved record trading volumes in its first days as the new entrant burst into the ranks of Australia's top 25 listed companies. The deal has been hailed as a model of professional execution by Australia's investment community in stark contrast to the last major demutualization exercise, the botched AMP float in 1998.

Talk about a growth story. If you're tired of investing in companies with uncertain prospects and vague business plans, try investing in death. You can't get much more certain than that. NV Multi became the first undertaker in southeast Asia to secure a stock market listing in August when it launched on the Kuala Lumpur stock exchange. It opened strongly at M$4.50, above an offer price of 3.30, but closed at 4.04 after an active day's trading.

After high-profile failures to secure regional acquisitions this year, Singapore Telecom has had better luck in India. A US$400 million investment has brought the company a 20% stake in Bharti Telecom and 15% in Bharti Televentures – the largest ever foreign investment into India's telecommunications sector, and the biggest ever Singaporean investment in India. SingTel, which pulled out of India's telecoms sector in the late 1990s, appears to have struck at the right moment this time around. Within two weeks of its investment decision, the government announced the opening of domestic long-distance telecoms business to private participants. The investment has revived interest in India's telecoms sector, which has been depressed due to uncertainty on regulatory issues. It also reflects a growing interest among major Asian telecommunication companies in India, among them Hutchison Whampoa.

One of Singapore's strongest and most influential issuers has completed a successful pair of bond issues off the back of a US$2 billion debt issuance programme established in July. The US$500 million global bond and S$600 million local bond issues from the Port of Singapore Authority (PSA) in July both present useful benchmarks. PSA, wholly owned by Temasek Holdings, the investment arm of the government of Singapore, is the owner and operator of one of the world's largest and busiest container ports. It contributes 2.9% of Singapore's GDP and holds an Aa1/AAA rating; its business actually grew during the Asian crisis.

It boasts a total of four small listed companies, is only open every other weekday, and the trading rules changed twice in its opening week. But let's not mock Vietnam's new stock exchange: it's a landmark that it exists at all. You can argue about the date, but it is fair to say it has taken at least six years for the Securities Trading Centre – located in Ho Chi Minh City – to open its doors to investors.

Videsh Sanchar Nigam Ltd (VSNL), India's monopoly player in the international telephony market, celebrated the country's Independence Day in New York when its shares were listed on the New York Stock Exchange on August 15. This is the first time that an Indian state-run company has listed its shares on a US market. VSNL did so by converting 95% of its global depositary receipts into American depositary receipts. GDR holders account for 30% of VSNL shares while the government holds 52%. The rest is widely held in the domestic market. Bank of New York is the depositary bank.