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Asia's capital-raising frenzy delivers report charges to banks within the third quarter

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© Reuters. FILE PHOTO: A Chinese flag is pictured in the Lujiazui financial district in Pudong, Shanghai

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Posted by Scott Murdoch

HONG KONG (Reuters) – Asia's equity capital markets posted a record payday for investment bankers in the third quarter, helped by a growing appetite for technology deals and the rush to get listed on China's new STAR market.

In the Asia Pacific region, including Japan, bankers received equity market (ECM) fees of $ 3.6 billion from July through September, up 145% from the same period last year. The previous high was in the fourth quarter of 2009 at $ 3.5 billion.

Bankers are also preparing to fatten up their salary packages when Ant Group is expected to raise up to $ 35 billion in a double listing in Hong Kong and Shanghai in October.

"The global capital markets are working. There is an enormous amount of money available worldwide," said Aaron Arth, head of the Asian ex-Japan financing group at Goldman Sachs (NYSE :). "All signs point to a constant need and need for capital."

Total stock market capital raised in Asia increased 148% to $ 133.8 billion for the quarter. ECM fees account for nearly 40% of the region's investment banking portfolio, up from 25% globally, making it a highly competitive business.

The strong result means that the region's fees of $ 6.9 billion for the first nine months of 2020 exceeded the $ 6.15 billion generated in all of last year.

While all major banks saw profits rise, Chinese banks benefited most from new listings on the Nasdaq-like STAR market. China International Capital Corporation (HK 🙂 became the region's top-selling company for the first time, tripling its fees to approximately $ 405 million in the nine-month period.

China-led IPOs accounted for 44% of IPOs worldwide in the first three quarters, with deals valued at $ 57.4 billion, more than double the figure for the same period last year.

Led by a $ 7.5 billion secondary listing for Semiconductor Manufacturing International Corp (SS :), there were 62 STAR market listings according to Refinitiv, raising $ 14.7 billion in the third quarter.

"In Asia, technology and digital adoption has accelerated due to COVID and this is leading these deals to be fully implemented in the capital markets," said Udhay Furtado. Citigroup (NYSE 🙂 Co-Head of Asia Pacific Equity Markets.

"The pipeline is more robust than ever. There are many companies in the region – they are of very high quality, these are companies that people want to own over the long term and that will be with us for generations."

In Asia, the value of technology capital deals increased 51% to $ 35.7 billion.

Paul Uren, co-head of JPMorgan (NYSE 🙂 global investment banking coverage in Asia Pacific, said equity markets would continue to be positive as liquidity remains high and interest rates likely to be held at record lows for the foreseeable future.

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