HONG KONG (Reuters) - Swiss bank UBS extended its lead in Asia-Pacific stock underwriting during the first half of the year, as its long history of targeting Southeast Asian markets helped it capitalize on a surge in deals in the region.
UBS, which has come out on top of Asia-Pacific equity capital market league tables for seven of the past eight years, raked in $120.8 million in estimated fees, more than the combined revenue of the next two banks in the ranking.
Equity capital market deals in Southeast Asia climbed 54 percent to $22.5 billion in the first half of 2013, a quarter of all Asia-Pacific ex-Japan volumes. Stock offerings in Singapore, the Philippines and Indonesia more than doubled, preliminary data from Thomson Reuters shows.
Strong economic growth and rising corporate profits has led to investors being much more confident about Southeast Asia, said Chito Jeyarajah, chief operating officer of equity capital markets, Asia ex-Japan, at Goldman Sachs in Hong Kong.
"As a result, the new issuance followed pretty quickly," he said.
But equity issuance in Hong Kong, which for the last few years had been a leading city for IPOs, fell 20 percent hit by concerns about a weaker Chinese economy.
UBS has historically maintained a broader equities research and trading operation in Asia-Pacific thanks to its model of referring clients from its large private bank, whereas investment banking rivals like Goldman Sachs and Morgan Stanley have focused more on the big China IPOs in Hong Kong.
The Swiss bank worked on a string of deals in Thailand and the Philippines. In the Philippines, it managed to garner 62 percent of equity capital market deals, helped by star banker Lauro Baja, its head of investment banking there, according to Thomson Reuters publication IFR.
In estimated fees, Goldman Sachs ranked second, earning $61.9 million, while Credit Suisse came third with $56.9 million, according to Thomson Reuters/Freeman Consulting Co., which is based on actual and projected revenue data.
Overall stock offerings in Asia Pacific climbed 5 percent to $86.8 billion but IPOs in the region tumbled 38 percent to $12.7 billion.
UBS handled $11.5 billion worth of deals, up 60 percent from the same period a year earlier while Goldman Sachs was second with $8.5 billion, a 30 percent rise. Deutsche Bank was third, managing $4.03 billion in offerings and leaping from its 8th position a year earlier.
Three of the top five IPOs in Asia Pacific came from Southeast Asia. They included the $2.1-billion listing of BTS Rail Mass Transit Growth Infrastructure Fund in Thailand and Mapletree Greater China Commercial Trust, Singapore's largest ever REIT listing at $2.06 billion.
Convertible bond issuance soared 71.4 percent to $12.6 billion but concerns over US interest rates and wild swings in US Treasuries were expected to slow issuance in the next few months.
"The market is going to be adjusting to a new normal in certain ways," said Damien Brosnan, head of Asia equity syndicate at UBS AG. "That product (CBs), much like the debt capital markets, will take a pause until the interest rate environment is figured out."