What's your outlook for the ADR business this year?
Lopian: There'll be more ADR business across Asia this year. It's fair to say that 2004 could be better than the prior three years combined.
China is always going to be at the top of the leaderboard in this part of the world in terms of volumes. The scale of the capital that is planned to be raised is massive, led by the banks and financial institutions. This really started at the tail end of last year with China Life. I would think the big deals will be the China banks, which will happen towards the end of the year. They alone will be over $10 billion.
Then there is India, which will also be a big market from a depositary receipt point of view. We also expect quite a lot of activity from Taiwan, even improving on last year's volumes - which were large given that Taiwan was 51% of global ADR new issuance in 2003. Korea is another place where a lot of capital raisings are scheduled.
As a major custodian you must have a view on whether we are we seeing more investment flows to Asia?
Global investors are looking at which economies are offering growth opportunities and if you look at the relative performance of the Asian stock markets compared to other parts of the world, they have performed well.
Clearly we are seeing money flow from the US and Western Europe and that trend is continuing. The confidence has returned here, and there has been a mood change in regard to equities, which were out of favour in Asia in 2001 and 2002.
Given how Asian economies are doing, your trade finance business must also be benefiting?
Yes, there is a natural relationship between trade and economic performance. Last year was a much better year. And with China continuing to expand its export machine we don't see that trend changing. India has also started to import more, after years of not being a major importer.
The growth of intra-Asian trade will continue to be a key trend, although the US will always remain important. But China is becoming increasingly important in the way it relates to other Asian economies.
What's your outlook for your Asian business in 2004?
We finished 2003 on a very strong positive note. The economies in Asia are looking good. China is altering the landscape obviously. The role of the US remains quite strong and with the US economy improving that is helping. The fact the Japanese economy is demonstrating signs of recovery is also helpful.
The big events in 2004 will be currency and interest rate moves, and especially their impact on Asian currencies. Currency realignment is a big issue.
Our bank is a securities and payments related entity with a focus on the capital markets, providing the infrastructure to support investors. Our ADR division services about two-thirds of the companies here in Asia with dual listings.
We also have a growing business with the insurance industry in Asia because of their need to improve returns as it relates to policyholders and promises they have made on those policies. They have increasingly become more global in terms of their investment portfolio and seeking external fund managers. We have tremendous capabilities that make this easier by helping them to measure performance and consolidate reporting.
I was pleased with the Bank's performance in Asia last year, as it reflected the growth of the Asian economies. The Bank is committed to Asia and is dedicating more resources to the region. We are opening a new office in Beijing, and we're expanding our capabilities in Shanghai to support regional trade finance activities. We have also expanded our Singapore operations center to be able to handle more in-region servicing. We want to improve our ability to respond to client needs in this time zone.
