awards-for-achievement-2009-day-3

Awards for Achievement 2009: Day 3

Today we announce some of our House Awards for FIG, GIG, TMT and Real Estate. We also award the Best Equity Brokerage House, Best Islamic Bank, Best Banks for Cash Management and Trade Finance, and the Law Firm of the Year.

The following banks will be honoured at an awards dinner at the Conrad Hotel in Hong Kong on February 4. If you would like to book a table at the event, please contact Stephanie Cheung on +852 2122 5225 or [email protected].


BEST FIG HOUSE
Morgan Stanley


Morgan Stanley wins this award for the depth of its financial institutions group, across the region and across sub-sectors, as well as for its role on industry-defining deals. At the time of going to press, Morgan Stanley had completed seven M&A transactions totalling $1.5 billion, 10 equity transactions totalling $2.6 billion and 15 debt transactions worth roughly $4.6 billion in 2009, and it had been active in the key markets such as China, South Korea and Taiwan, as well as in smaller FIG countries such as Thailand and Indonesia.

Morgan Stanley spotted the trend of deals involving multinationals divesting assets across the region -- it advised GE Capital on the $391 million sale of its consumer finance business in Thailand to the Bank of Ayudha; worked as the sole financial adviser to Aegon on the sale of its wholly-owned subsidiary Aegon Taiwan to Chung Wei Yi for $90 million; and, once again, advised GE Capital, this time on its transfer of GE Money Bank in the Philippines to Banco De Oro for $28 million. 

Morgan Stanley was also sell-side adviser to AIG on the sale of its Nan Shan insurance business in Taiwan to Primus, a deal that has given many of its competitors ammunition to suggest it could be involved in a high-profile blow-up. But irrespective of the outcome of that deal, the fact that Morgan Stanley came to the table late and still managed to secure the leading role advising AIG deserves credit. And though it missed the OCBC/ING Asia private bank sale, it spotted other trends including bank recapitalisations and industry consolidation, advising, among others, Taishin Financial Holdings on the $822 million sale of its brokerage business to KGI Securities.

It also worked on the sale of RBS's Asian banking operations. That deal is not yet closed and some assets are yet to find a home. But it did involve Morgan Stanley weaving its way through complex regulatory issues from Taiwan to Vietnam, again testament to the breadth of its franchise.


BEST GIG HOUSE
J.P. Morgan

This was one of our most difficult decisions this year. 2009 has been dominated by equity issuance from China and equity league tables are clearly topped by UBS. But equity deals were not the only component of the year within the general industries, which also saw a number of landmark M&A transactions. And on balance, the roster of deals J.P. Morgan closed across products and across countries earned it this award.

J.P. Morgan worked on two of the handful of financial sponsor deals that closed this year. It was a sell-side adviser to Anheuser Busch InBev on the sale of its Korean business, a deal that won our best private equity and best leveraged financing awards. It also worked with private equity firm Bain Capital on its investment in Gome, a Chinese retailer.

In China, the bank worked with Chinese state-owned enterprise Sinotruk on a deal for Germany's Man group to pay €560 million ($824 million) for a 25% stake in Sinotruk. The deal was pioneering, involved a number of firsts and has been cited to us by the street as a deal that should spawn copycats in 2010. J.P. Morgan also worked with China Investment Corporation on its $850 million acquisition of a 15% stake in Hong Kong's Noble Group.

J.P. Morgan's deals also show geographical diversity. In Thailand it worked with PPT subsidiary PTTI on a $335 million investment in Australian Straits Asia Resources, a deal involving Thailand, Australia, Singapore and Indonesia. In India it continued to work with Tata group companies Tata Motors, Tata Steel and Tata Power on various financing deals.

On the capital markets side, J.P. Morgan worked on the $1.26 billion initial public offering of China Zhongwang Holdings, which was the largest IPO to have been launched globally in 2009 when it priced in early May. It was a joint bookrunner on the $768 million IPO by BBMG Corporation, which saw its retail tranche 770 times subscribed, and on the $111 million IPO by Trinity, a menswear retailer and Li & Fung affiliate, which was a small but very successful transaction. It was also a leading bookrunner on the $1.63 billion IPO by Wynn Macau, the Macau arm of the casino business owned by Las Vegas gaming magnate Stephen Wynn.

On the debt side, J.P. Morgan was a joint bookrunner to a $1 billion issue of bonds by Korea National Oil Corporation in July, which attracted strong European as well as Asian demand. It also worked with PSA, a Singaporean port operator, on a $500 million bond offering.


BEST TMT HOUSE
Goldman Sachs

Competitors of Goldman Sachs sometimes criticise the firm for being too focused on a few large clients -- though it's not a complaint you hear from the clients themselves, who once again passed a big chunk of work to Goldman's TMT team this year. Another criticism levelled specifically against the firm's TMT franchise is that it is too telecoms focused, but this was a year when that sector produced the biggest deals and the heftiest fees. So, on balance, it was difficult to find fault with Goldman's TMT business this year.

Goldman started the year with sell-side mandates from Li Ka-shing, arguably Asia's most prolific asset trader, to exit his telecommunications businesses in Israel and Australia. And with billions of dollars at stake, there was no question that negotiations be held anywhere but at Cheung Kong Centre, Li's base in Hong Kong, even if one buyer was British and the other Israeli.

As the year progressed, Goldman closed 21 transactions across nine countries.

Despite the fact that financial sponsors -- who are traditionally a driver of M&A activity in TMT -- were absent in 2009, it was still a reasonable year for TMT M&A. And Goldman's roster of closed deals reflects this activity. Goldman's big misses were actually the two deals that were driven by sponsors: the takeover of Chartered Semiconductor by Abu Dhabi-based Atic and, in Taiwan, the merger of KBro, in which Carlyle was the majority shareholder, into Taiwan Mobile.

On the capital markets side, Goldman played a leading role on one of the biggest equity deals of the year: the $3.3 billion re-listing by Ananda Krishnan's firm, Maxis. Also in Malaysia, Goldman was involved in the $1.5 billion rights issue by Axiata, the largest rights offering ever in the TMT sector in Asia ex-Japan. In India, the bank worked with beleaguered information technology firm Satyam Computers on the sale of a 31% stake to Tech Mahindra, a mandate executed in close coordination with the government of India and which was the focus of intense public scrutiny leading up to the sale.

By the reckoning of those working in the sector, TMT was one of the areas that saw a robust fee pool. And even the rivals vying for this award agreed that Goldman earned a healthy share of the TMT wallet this year.


BEST REAL ESTATE HOUSE
J.P. Morgan

Initial public offerings by Chinese property companies returned with a vengeance in the final months of this year with nine listings in Hong Kong alone, making it feel at times as if this was once again the story in the sector. But taking a step back and looking at the year as a whole, there was actually a whole lot of other stuff going on. Early in the year there were rights issues and recapitalisations; followed by bond issues, a few convertible bonds and the odd M&A transaction; and there was a reawakening of the real estate sector in India with numerous follow-ons and QIPs.

The India trend was dominated by Morgan Stanley, which completed six transactions and firmly showed that its sector focus is broader than just Chinese developers. However, looking at the spread of work across different countries and products, J.P. Morgan once again stands out. The bank didn't dominate any one trend, but rather focused on key deals in the sector -- the largest ever India block trade ($781 million) for DLF; the $1.2 billion rights issue for CapitaLand; and the highly successful $1.78 billion Singapore IPO for CapitaMalls Asia.

It capitalised on its long-term relationships with property companies across the region, while also winning deals from accounts that have traditionally given their business to rival banks -- Country Garden being a notable one. Surprisingly, J.P. Morgan was left out of CapitaLand's $762 million CB, which went to Credit Suisse, but having done three other deals for the group this year, it is hard to argue that the bank has fallen out of favour with this important client.

With one of the largest teams dedicated to real estate in Asia -- 22 banking professionals -- J.P. Morgan was able to complete more deals than anyone else and print trades in seven different countries. It was also more active in the debt market than all other international banks, except for HSBC, with three bond transactions, including a sole-led $300 million high-yield deal for debut issuer Country Garden, which was later tapped for a further $75 million.

It did only one of the Hong Kong IPOs for a Chinese property developer (Glorious Property, together with Deutsche Bank and UBS), but true to form this was the largest one and arguably also one of the top quality ones, as evidenced by the fact that it achieved the second highest P/E multiple of the lot. Aftermarket trading may not have been ultimate, but Glorious was the first property IPO to price (beginning of October) and with so many other deals following suit at mostly lower valuations, a 10%-12% decline by early December is hardly a disaster. Weighing in J.P. Morgan's favour is the fact that it didn't pull or re-price any of its deals during the year.


BEST EQUITY BROKERAGE
UBS

This is one of the business segments where developments in Asia have not quite mirrored those in the West, at least to date. Around this time last year, counterparty risk seemed to be the driver for clients deciding who they would trade with, but it didn't remain an issue for that long. "There was a flight to balance sheet strength but in Asia this was less visible," said one of our specialists, who was not pitching for this award, to explain what had driven clients' decision-making through the year.

And so, UBS has wrested back this mantle from J.P. Morgan to whom it lost it last year.

In Asia, UBS attracted net new money inflows into its wealth management business. The firm's China joint venture positions it well to capture a share of the growing Chinese wealth management market, which will be a fillip for both its brokerage and investment banking businesses. On the research side, the firm managed to maintain a fair degree of stability in its Asia team even through a period of extreme dislocation.

On the prime broking side, UBS has always been one of the players with the biggest market share. It maintained margins for its customers and was rewarded by clients continuing to use its services. As redemption pressure on hedge funds eased from the middle of this year onwards, UBS's clients started to trade again.

The firm that was mentioned to us time and again in our independent polling as having had the most momentum this year was Credit Suisse. Even Credit Suisse's competitors acknowledged that the firm is becoming a force to reckon with in the brokerage industry in Asia. And the market share Credit Suisse has gained during the year, as estimated by independent data providers, has borne this out.

But as with our other awards, the best brokerage is chosen based on flow of business during the course of the year and not on performance on a specific day or month or even quarter. And in 2009, UBS managed to maintain its number one ranking and the largest share of revenue. If Credit Suisse's momentum continues, 2010 could well see a different winner.


BEST ISLAMIC FINANCE HOUSE
CIMB Islamic

CIMB Islamic once again wins this award for maintaining its prolific track record locally and internationally. It retains its number one position in the domestic Malaysian sukuk market with a roughly 40% market share, which is all the more impressive given that Malaysian issuers account for 20% of the global market share.

CIMB has been at the forefront of introducing new Islamic products or issuers of such products. As a result, CIMB is key to broadening the market. For example, the water utility company Pengurusan Asset Air's M$20 billion ($5.8 billion) Islamic CP/MTN programme innovatively combines two Islamic principals -- a Musyarakah (which is a partnership arrangement between two or more parties to finance a business) with an underlying Ijarah (which is an Islamic mode of leasing). Meanwhile, CIMB Islamic's inaugural corporate Islamic sukuk issuance for City Development allowed the Singaporean issuer to tap new markets and access non-traditional financing, and is also viewed as a stepping stone for other corporates to follow suit in venturing into alternative fundraising sources in Singapore.

CIMB Islamic has also been on the bigger deals in the broader capital markets this year. For example, it was on the listing of Maxis, a top mobile operator in Malaysia, which is hailed elsewhere in our write-ups as a standout equity deal. The new Maxis shares are Shar'iah compliant, which makes the deal highly attractive and accessible to Islamic investors as well as traditional equity investors. Additionally, CIMB helped Malaysia's state-owned oil company Petronas issue a $3 billion conventional bond with a $1.5 billion sukuk, which was the first global corporate sukuk, and the first foreign currency denominated sukuk in Malaysia under the Malaysian International Islamic Financial Centre initiative. While there are critics of the Petronas issue -- the spread widened in the first few days after issuance -- many agree that the deal helped solidify Asia's leading role in the sukuk market.

CIMB is also leading the way with Islamic structured products, which it first introduced in 2007 with Islamic All-Stars Global. This year, it rolled out the Greater China and Commodities Income Protected Plus-I (GCCIPP-i), which provides investors with regular profit payments plus the opportunity to earn a variable profit -- the key product innovation is that it is linked to its own CIMB Islamic Bank's tier-2 junior sukuk. Importantly, CIMB provides a secondary market for its investors -- it is not just introducing new products, but also helping to establish the market to support those products.


BEST CASH MANAGEMENT BANK
Citi

Citi proved a lot of sceptics wrong this year, continuing to win new cash business despite concerns about the US government taking a stake in the institution. Present in 18 countries in the region, Citi racked up $300 million in cash management sales and increased revenue by 4% year-on-year during the first nine months. Today it has more than $100 billion in deposits, up by roughly 30% compared to October 31 last year, from its 44,000 customers ranging from global multinationals, to regional corporates and local small- and medium-size enterprises in Asia-Pacific.

The bank's local and regional receivables offering, standardised but diverse product suite and integrated solutions are just some of the things that set Citi apart from its competitors. Some major developments this year include the creation of new joint cash and trade teams within the bank's structure, Asia money-market deposit accounts, an enhanced receivables vision product and the global roll out of CitiDirect BE, a web 2.0 internet portal for all of the bank's global transaction services customers.

Citi is an expert at providing both local and regional solutions to its cash customers. An example of the former can be found in Indonesia where the bank implemented CitiConnect e-Tax as a single online access point for customs tax document submission, as part of the country's implementation of the Indonesia Single Window Project. In terms of regional solutions, Citi put together a combined Australian dollar and US dollar regional treasury and pooling solution for Australia's Arrow Energy. Other mandate wins include the processing of international exotic currencies for the Agricultural Bank of China, a liquidity management solution for Vietnam's FDT Group and all payments and collections for Sri Lanka's Mobitel.


BEST TRADE FINANCE BANK
HSBC


HSBC maintained its leadership as the best trade finance bank in Asia by continuing to provide one of the few truly regional offerings. Only one other institution, Citi, even comes close to matching HSBC's physical presence in the region -- 1,029 locations in 20 countries, staffed by 2,148 trade and supply chain specialists. The bank increased its presence this year with eight new branches in China and an expanded partnership with India's IL&FS Investsmart that gives its trade customers access to 246 branches across India. In the first nine months, HSBC processed $141.2 billion worth of trade transactions for 56,844 clients in Asia-Pacific. But the bank's trade business is notable for more than just its size and scope -- in 2009 it has stayed on top of the products and services that customers want.

The bank offers trade customers the typical range of services, including letters of credit, document checking and structured trade finance, but arguably the biggest addition to its product suite this year was the addition of cross-border renminbi trade settlement. After the People's Bank of China eased some restrictions on the currency earlier this year, HSBC was one of the first foreign banks approved to offer settlement in renminbi. The service is offered to the institution's customers in Hong Kong and Southeast Asia. Other notable achievements this year include the launch of the HSBC Trade Confidence Index in June and its initial roll-out of OneHSBC Trade, a new trade and supply chain e-platform that is the culmination of a $50 million technology investment in trade during the past three years.

One impressive trade solution from the bank this year was for a German company with more than $1 billion in trade transactions originating in the region each year. HSBC provided the company with an electronic document processing solution over a host-to-host connection or HSBCnet.


LAW FIRM OF THE YEAR
Freshfields


Equity deals dominated Asia's capital markets in 2009 and no law firm played a bigger role in that story than Freshfields. Its lawyers advised on five of the 10 biggest deals of the year: the IPOs by Metallurgical Corp of China (MCC) and Sands, the H-share listing of China Minsheng Banking, the sell-downs by Allianz and Amex in ICBC, and Bank of America's sell-down of its China Construction Bank stake -- deals with a total value of more than $15 billion.

Linklaters, our perennial winner of this award during the past few years, advised on just two of the top 10 equity deals and played only a bit part in the year's most significant trend. However, other firms ran Freshfields close -- Davis Polk in particular. Its capital markets practice had another good year thanks to mandates on several global equity offerings as well as a handful of the dollar bonds out of Korea. However, it was Cleary Gottlieb that really dominated in the G3 bond market. The firm advised on a ream of deals out of Korea, including issues for the sovereign, KDB, Kexim and Posco, among many others, as well as deals in the Philippines by Psalm and, again, the sovereign.

We were impressed by both these firms' track records in 2009 and applaud the quality of deals they worked on, but it is difficult for niche Wall Street firms to compete with the extensive networks of City firms like Freshfields.

Having said that, critics may point out that Freshfields is a one-trick pony too -- its work outside China was negligible -- but it was a trick that paid extremely well in 2009 and, on balance, it could not be ignored. Even without a debt deal worth mentioning, Freshfields still topped the league tables for Asia capital markets offerings during the year, by our reckoning.

And when the M&A story kicked in later in the year, Freshfields was a big player there too, winning some of the region's most prominent M&A mandates, including billion-dollar deals such as Newbridge's sale of its Shenzhen Development Bank stake to Ping An, OCBC's acquisition of ING's Asia private banking business, Man's acquisition of a 25% stake in Sinotruk and China Unicom's strategic alliance with Telefonica, as well as strategic deals such as Texas Pacific Group's investment in Daphne, a Chinese shoemaker. 

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