Day 3 FinanceAsia Achievement Awards 2003 - Investment banking

We are pleased to announce the winners of the following house awards: M&A, equity, straight equity, equity-linked, international bonds, high yield bonds, local currency bonds, loans, project finance, mid-cap equity, small-cap equity, brokerage, equity res

Best M&A House

Morgan Stanley

Morgan Stanley has had a dynamite year in M&A and has managed to corner a position on the bulk of the most exciting deals.

Not surprisingly it sits at the top of the league table, just above JPMorgan. Morgan Stanley pips JPMorgan this year because while they have sat on opposite sides of the table on some of the key deals, there are a couple of standout deals where only one Morgan has worked and it was the Stanley one.

Obviously both firms worked on both of our deals of the year - the Hanaro and Shinhan/ Chohung trades. However, Morgan Stanley also worked on several other significant FIG M&A trades, namely the $1.2 billion acquisition of KEB by Lone Star; the Prudential acquisition of Hyundai Investment Trust; the acquisition of Chekiang First Bank by Wing Hang; the Chinatrust acquisition of Grand Commercial Bank; and acquisition of 51% of BII in Indonesia by Temasek and Kookmin.

Morgan Stanley also acted as advisor on the sale of SingTel's Yellow Pages business and on asset injections for two of its house clients, Sinopec and China Telecom.

At a more strategic level, Morgan Stanley got China M&A right. It realized that WTO entry and changes to the shape of global industry were going to make China a ripe M&A market and it positioned - in M&A-speak - its "dialogues" accordingly.

It was therefore an adviser on the groundbreaking joint-venture between France's Thomson and China's TCL. This deal married China's low cost manufacturing base, with a European brand and distribution, for the benefit of both parties. Similarly it got involved on Huawei's deal with 3com and on Gillette's acquisition of Nanfu Battery for its Duracell division.

On the automobile side, it helped Nissan fully configure its China strategy in a deal with Yulon in Taiwan - a necessary step since both had Dong Feng Auto as their mutual mainland partner. This was also the first deal to be executed since the introduction of Taiwan's new M&A law.

All in all, 2003 was a year marked by intelligent thinking by Morgan Stanley's M&A team and an appropriate focus on the region's key M&A markets and sectors.

Best Equity House


We found the equity awards particularly difficult to judge this year because there has been such a divergence between those banks, which have dominated in straight equity markets and those in equity-linked, which has become much more commoditized. In the end, we decided to split the award into three, recognizing straight equity, equity-linked and an overall house.

And even though Citigroup has not won either of the individual categories we have made it best overall house because it is equally strong across both product areas and has a wide platform encompassing big privatizations, innovative secondary offerings, accelerated placements, ADRs/GDRs, convertibles and exchangeables. Taking equity and equity-linked combined, Citigroup sits at the top of the Dealogic league tables as of December 17 when we cut the awards off.

At this point it had raised $4.08 billion via 24 deals compared to $4.04 billion for Goldman Sachs, which ran 17 deals and $3.95 billion for Merrill Lynch, which ran 20. Behind these three are JPMorgan and UBS on $3.65 billion apiece via 19 deals.

Of Citigroup's total, $2.7 billion comprised straight equity transactions and $1.38 billion equity-linked.

On the straight equity side, Citi has been very strong in North Asia particularly Hong Kong, China and Taiwan, although it also led the groundbreaking $294 million secondary offering by Infosys. This was a landmark transaction for the Indian capital markets and represented the first sponsored DR offering on behalf of existing shareholders via a domestic tender.

From China, Citi was one of the four leads on China Life's $3.021 billion IPO, an important deal for the firm that shed old ghosts and cemented its position at the top of the league tables.

Yet while it is China Life that will be remembered as the defining deal of 2003, it is in Hong Kong that Cit has really made its mark with a string of deals. The firm has launched placements for PCCW, Vanda Systems, Brilliance China and

Its approach has been to use an accelerated bookbuild and relatively wide price range to build momentum quickly, tighten the range and in some cases upsize the deal on the back of strong subscription. With PCCW it came in for quite a lot of criticism after leading a second deal so soon after the first even if it was for two different vendors. But few would deny that its first trade was anything other than a spectacular and highly profitable coup.

In Taiwan, Citi has also been active and jointly led the highly commended $936 million follow-on for China Steel. This deal only just missed out on our award for best secondary offering and has been cited by many as textbook perfect execution.

Citi also scores highly with repeat business. Its second China Steel trade followed a smaller deal earlier in the year and it went on to lead convertibles for Brilliance China and after completing successful placements.

Where the convertibles side of the business is concerned, Citi has done deals for a wide range of clients and across all markets. From Taiwan there have been deals for CTCI Corp, Sintek, Taishin, Primax, KGI, Pou Chen and Fubon. From Hong Kong came Brilliance and From India, Tata Engineering and from Singapore, the controversial and unforgettable exchangeables by Singapore Technologies into ST Engineering and CapitaLand.

Where Citi scores highly is marrying its strong corporate franchise with effective ECM execution. The firm has always had a dominant position in Taiwan and thanks to rainmaker Francis Leung is now coming good in both Hong Kong and China.

But its ECM team are always highly praised, even by the competition. The firm is one house that others always enjoy working with because of its no nonsense approach and fairness in dealing with fellow syndicate members.

Citi is also a house, which manages the market well. It doesn't let stock prices crater in advance of one of its deals just so that it can say it priced something at a tight discount. And secondary market performance is normally balanced enough to satisfy both issuer and investor.

The firm further benefits from having one of the largest teams on the street, with a total of 14 members led by three managing directors: Kirsty Mactaggart, Willy Liu and most recently Craig Duffy from ING. Behind them are three equally effective and hard working VPs: Serena Wallace Turner, Pierre Kiecolt-Wahl and Udhay Furado.

Such is the team spirit generated, that the whole desk celebrated the successful listing of China Life yesterday by attending the opening performance of Lord of the Rings together.

Best Straight Equity House

Goldman Sachs

In 2002 an ocean lay between Goldman Sachs and its nearest competitor in the equity league tables. If past experience is anything to go by 2003 should not have been a particularly great year for the firm. Typically it tends to have one good year executing deals, then a fallow one as it re-stocks the pipeline.

Yet as of December 17, it ends 2003 right at the top of the straight equity league tables with $3.7 billion under its belt via 15 deals. Behind it sits Merrill Lynch on $3.15 billion with 15 deals and in third place, UBS with $2.92 billion from 13 deals. It was also responsible for four of the five largest deals.

For the first nine months of the year the team was run by the complementary talents of John Daly and Mark Machin. Where Machin focused his intense analytical skills on one or two big elephant deals, the irreplaceable Daly could be found filling the firm's coffers with one benchmark deal after another. Underneath them are VPs Jason Cox and Richard Cormack, the firm's new rising stars.

In September Daly returned to New York, leaving Machin in sole charge. And though the Goldman team may be relatively small, Machin's decade-long experience in Asian equity capital markets continues to shine through.

For example, few would have thought Bank of China would brave a $1.89 billion placement so late in the year. It took experienced market judgment and a deep understanding of the nuances of the Hong Kong investing public to realize that the timing of such a large deal could hardly have been better.

If the firm has the right ECM team and the right clients, then competitors spend a lot of time trying to take away both. Goldman has come under intense pressure in Taiwan, where it has historically generated much of its investment banking revenues. But it continues to hold onto the big strategic trades such as the $1.58 billion ADR for Chunghwa Telecom.

A number of its competitors also claim the league tables are skewed by repeat issuers such as TSMC and argue for stripping out the semiconductor giant since it always awards Goldman its mandates. Yet the fact is that were Goldman to mishandle a TSMC trade, the company and government would probably have no compunction awarding future deals to someone else. On the contrary, each execution of a TSMC deal appears to improve on the last

This year Goldman also won its first mandate to dispose of TSMC stock by Philips, which was no doubt impressed by its ability to execute transactions at ever tighter discounts to spot.

Goldman is pre-eminent in Taiwan, but it is also one of the most well diversified houses across the region. Alongside deals for ASE, Benq, China Steel, Nan Ya, Ambit and Hi Tech, it has also completed offerings in Malaysia, Korea, India and China.

In Malaysia it was one of the bookrunners on the hugely successful $532 million IPO for Astro, our Malaysian capital markets deal of the year. In India, it led the innovative $293 million secondary offering for Infosys.

In Korea, it jointly ran the books on a $241 million GDR for Daewoo Shipbuilding and sole led a $465 million sell down in Kookmin Bank. Finally from China, it led a $230 million placement by Li & Fung.

Best Equity-Linked House

Morgan Stanley

The equity-linked sector has been one of the most hotly contested all year, with firms falling over themselves to pitch ever more aggressive terms and steal deals off each other. And yet despite the intense rivalry generated by the battle to win business, Morgan Stanley has been able to stand head and shoulders above the competition for virtually all of the year. More surprisingly still, it attains its crown without having to warehouse transactions on its own balance sheet.

As of December 17, when we closed the awards process, Morgan Stanley had raised $1.92 billion compared to $1.3 billion by Citi and JPMorgan, both of which also had good years.

Much of this success can be credited to ECM head Danny Palmer and his enthusiastic syndicate man George Taylor. On arriving back in Asia early last autumn, Palmer quickly came to the conclusion that equity-linked was an area where Morgan Stanley could quickly build market share.

A convertibles specialist by background, Palmer also judged that at time of historically low interest rates borrowers would maximize their equity-linked borrowings before rates started to rise. And he was right. Weighed down by the Gulf war and SARs, first half issuance was dominated by quick fix convertibles rather strategic straight equity deals with long lead times.

Fittingly, Morgan Stanley opened the year for everyone with a $144 million issue for Wan Hai Lines, the first non-tech, non-FIG deal out of Taiwan since January 2000. Taiwan continued to dominate the rest of the year and Morgan Stanley was always at the forefront with transactions for Far EasTone, Chi Mei, E.Sun, UMC, Nan Ya, Teco and Mega.

Far EasTone stands out because it was lifted right from under Goldman's nose and turned around in the space of a weekend. E.Sun because it was the first Asian issue to incorporate a negative yield structure. UMC was made our equity-linked deal of the year, because of its superior execution and timing at the height of the convertibles boom. And finally there was Mega, which was won on overly aggressive terms, but finally came good after the leads sacrificed their fees to re-offer the deal below par.

But if Taiwan has dominated, there has been issuance from other countries in the region and Morgan Stanley has been in every single one save India. From Hong Kong, it launched a $50 million convertible for Panva Gas, the first ever GEM listed CB. From Korea it raised $287.5 million for LG Electronics, the first equity-linked deal from the Republic in a year and the first with a zero yield structure.

Finally from Singapore, there was ST Assembly's concurrent $230 million equity and convertible offering. The transaction was a difficult one because many analysts viewed the share price overvalued. Singapore also has a history of badly judged deals, but this was one that saw smooth execution after the lead's waited for a morning's trading to see how the market was behaving and then used the concurrent structure to build momentum and leverage pricing.

Best International Bond House


If you were to tell anyone that HSBC had won best international bond house only a few years ago they would have fallen off their chairs laughing. For many years HSBC had to battle against the perception that it was only included in Hong Kong corporate mandates because of its lending relationship with the borrower in question. The bank didn't have a great roster of clients across the region and few borrowers were willing to risk handing it dollar mandates after US investment banks rightly or wrongly convinced them that HSBC had no distribution skills in the US where most deals were placed.

But in the evolving post 1997 financial landscape, borrowers have become less fixated on US distribution. For most deals now, the bedrock of support comes from Asia itself. In tandem with this change, HSBC has not only grown to become a global powerhouse, but is a mighty force in virtually every country across the region - Taiwan being the main exception. It is now the fly-in, fly-out US investment banks, which are finding it ever harder to compete with HSBC's on-the-ground presence and integrated platform across all fixed income product areas.

Credit for this platform lies with Stuart Gulliver, who was promoted to the newly created post of regional treasurer back in 1994. Where once individual countries had their own P&L and trading book, Gulliver created a single platform reporting into Hong Kong. On the debt side, Mark Bucknall became his debt syndicate manager and then head of debt capital markets.

The strength of the platform they created has seen both men elevated to global roles based out of London. In Bucknall's place, Stephen Williams now runs the debt finance group (DFG) and can be credited with significantly broadening the bank's mandate winning abilities around the region.

The softly spoken Englishman has deep-seated relationships in Malaysia and his hire of Joel Consing in Manila has resulted in a string of mandates from the Philippines. Over the past year, both men have entrenched their position within the organization as William's empire expands across China as well as Japan and Australia, while Consing has become head of DFG for South East Asia based out of Singapore. Rounding off the main members of the team are Andy Cairns and Bryan "there are many ways to skin a cat" Pascoe, Asia's longest-standing, no-nonsense syndicate head.

Choosing HSBC as best international bond house was nevertheless not an easy decision. It faced stiff competition from Citigroup, which runs a similar business model, UBS, Merrill Lynch and Goldman Sachs.

UBS has been just about everywhere this year and only narrowly missed out even after Hutchison Whampoa came thundering back into view with its $5 billion bond issue of November. It has the most innovative roster of deals and the broadest platform by product (high yield and high grade) of anyone.

But it was not involved in any of the year-defining Hutchison Whampoa trades. And while it could be argued that these were a one-off and are unlikely to repeated, virtually the whole DCM community knew what was coming this year and positioned themselves as such. HSBC lead managed three out of the five deals.

Both Goldman and Merrill are also Hutch house banks, while Citi scored a great coup by getting on the final deal in November. As of December 17, Merrill stood second to HSBC in the Dealogic G3 league table after notching up an impressive list of deals in Korea and also India, where ICICI ranks as our Indian capital markets deal of the year.

Goldman too resurrected itself from the dead to finish third and has been the only house to lead both the China and Korea sovereign bonds, as well as a high yield deal for Indosat and cross over deal for Hyundai Motor.

How much HSBC made or lost on its two bought trades for Hutch in dollars or euros has also been a matter of debate. What can be said with some certainty is that both deals achieved the borrower's objectives and catapulted HSBC to the top of the G3 league tables.

In addition to Hutch, HSBC also led the well-judged debut offering by the Airport Authority of Hong Kong and a $500 million trade for PCCW-HKT. Elsewhere in the region, it continued to remain a house bank for bond issues by the Republic of the Philippines, albeit earning ever lower fees.

In Korea it was one of the leads on the Korea Development Bank's well-received benchmark dollar and euro deal of September and a $400 million trade for IBK.

Best High Yield Bond House


UBS had a phenomenal year in debt capital markets and had it been involved on just one of the Hutchison Whampoa deals our final results might have looked very different. But there is absolutely no question that it has no equal in high yield debt and here it has been active across the entire region.

The indefatigable Paddy O'Brien has had a non-stop year, aided and abetted by Ranobir Mukherji and hard working syndicate head Mark Leahy in Singapore.

UBS may not be head of the overall debt league tables, but non-investment grade deals tend to be smaller in size and take longer to execute because of their greater complexity and weaker credit standing. As a result they pay higher fees and based on these league tables UBS will always rank within the top three.

Getting high yield deals across the finishing line takes sound market judgment and strong structuring skills rather than a lending relationship or a large balance sheet. It also takes innovation, an area where UBS excels.

In late 2002, UBS launched the first public bank capital deal out of the Philippines and in 2003 it followed this market opening exercise with more deals for Metrobank and a debut $130 million issue for Equitable PCI. This latter deal was also re-opened one month later for a further $70 million, taking advantage of good momentum in Philippines spreads.

In October, UBS also launched one of our favourite small deals of the year, a $150 million debut five-year issue for Banco de Oro (BDO) in the Philippines. Though the deal size was small, the order book was large ($750 million).

Timing was also perfect since sovereign spreads crumbled one month later after the Finance Secretary resigned and an acting cohort of jailed president Estrada announced his candidacy for president.

UBS's main strength has historically laid in Indonesia and 2003 continued to prove fertile ground with benchmark deals for PT Bank Mandiri, PT Bank Rakyat Indonesia and PT Medco Energi. In the case of the two banks, it was important both deals went well since they were viewed as precursors to IPO's a few months later. And both did.

Mandiri attracted an order book of over $1 billion and achieved pricing much closer to Philippines levels than anyone was expecting. BRI went one better and priced through Mandiri.

Rounding off the investment bank's year, UBS has also been active in Hong Kong where it completed the first true high yield bond from China since 1999 - a $175 million issue for AES China. It also executed a $115 million issue for First Pacific Holdings, significantly improving the company's financial flexibility in the face of many doubters.

Best Local Currency Bond House


After having a miserable time in the local bond markets in 2002, HSBC finally got its act together again this year and reasserted itself. Its market share was 7.5% last year, and this year it doubled that to a market-leading 14.8% with almost $8 billion of issuance in 270 transactions.

Of course, the familiar refrain is that HSBC is Hong Kong-centric and if you strip out the Hong Kong dollar bond market business (which it utterly dominates) then it is not such a powerhouse. This is an interesting argument, and something like the argument we heard about stripping Hutchison out of this year's G3 league table. Of course, you can do that but it ignores reality.

In any case, HSBC can claim a strong position outside Hong Kong dollars this year. It has raised $2.58 billion in other Asian currencies, which puts it third, just behind Deutsche on $2.68 billion, which is ranked top on this basis.

Even if you accept that some of the Hong Kong dollar bond market is a pure interbank market, it is clear that not all of it is, so it cannot be totally discounted. Deals such as the HK$600 million 15 year note for the MTRC cannot be ignored, nor the Hong Kong Mortgage Corporation's HK$3 billion mortgage-backed securitization, which was the largest residential mortgage-backed securitization in Hong Kong.

Likewise the introduction of an entirely new asset class to the Hong Kong market - the $3 billion synthetic securitization of taxi and public light bus loans.

Outside of Hong Kong, its presence was felt on the largest domestic Philippine transaction ever, the Ps74 billion retail treasury bonds, where it advised the government on how to structure the auction process. In Malaysia it gained the lowest ever ringgit coupon for Sime Darby with a M$500 million Islamic bond - the first ever to be bookbuilt. And in India it gained the lowest ever coupon for a 12-year bond via a Rs7 billion issuance for Power Grid.

Of course, weaknesses remain. Few foreign firms seems to be able to get Korea right - thanks to fierce local competition - and that is perhaps forgivable. But it remains for HSBC to match Deutsche and Citigroup in Taiwan, where the former in particular has had a stellar year and now leads the pack among foreign firms.

Best Loan House


Once again Citigroup has proved itself the pre-eminent leader of syndicated loans in the Asia ex Japan region, completing 55 deals for a total of $5.4 billion to end up on top of the pile in 2003. Citigroup finished in the top five in virtually every market across the region - beating out its main rivals everywhere except for a handful of countries.

The year was relatively low key, with few outstanding transactions, and competition for the lucrative deals was intense. Citigroup proved that even under such conditions it is able to win mandates and execute transactions successfully.

Energizer Asia Investment was brought to the Singapore market with a $250 million equivalent deal in its debut fundraising in Asia. Citigroup, along with Standard Chartered Bank, ran the books on the facility and attracted some 13 banks, achieving a sell down rate of over 80% with a final take below its 10% target.

In Malaysia IOI Corp awarded a sole mandate to Citigroup to arrange a Eur230 million refinancing. The successful syndication was even more impressive given that the deal paid substantially less than the earlier bridge arranged jointly with ABN Amro and achieved a sell down of almost 90%.

Taiwan was one of the few markets where they were unable to maintain their high standards set in previous years. Competition intensified with Chinatrust Commercial Bank, among others, submitting aggressive bids to win mandates.

One deal that slipped through the net was the NT$10.57 billion ($310 million) LBO for Taiwan Broadband Communications that was run by rivals Credit Lyonnais, Chinatrust Commercial Bank, DBS Bank and JP Morgan. This can in part be attributed to the movement of a part of their loan team across to Chinatrust Commercial just before the mandate was awarded.

This does not tell the whole story, however, as Citigroup led the NT$35.24 billion ($1.034 billion) AU Optronics deal. The response to the credit was overwhelming, with a total of 35 banks joining, leading to an increase of over NT$10 billion ($293 million).

Furthermore it was able to arrange a host of transactions for Taiwanese subsidiaries in other markets. These include the successful $103 million DET International Holding fundraising in Thailand and the $211 million credit for Formosa Plastics in China.

One criticism levelled at the US house in the past has been its dependence on flow deals in the region. This has not been the case this year as this only accounted for around 35% of the facilities they completed in 2003.

The lack of such deals caused its position to slip in Hong Kong as it fell a couple of rungs from fourth to seventh after arranging just nine deals compared with 13 last term. This did not prevent it from participating in some of the major transactions, including the highly successful HK$5 billion ($640 million) financing for HIT as well as some of the mainstays of the market including Sun Hung Kai and China Light and Power.

In Korea most arrangers failed to live up to the volumes recorded in 2002 due to the lack of bank credits at the beginning of the year. Citigroup was able to counter this by bringing a number of corporates to the market including S-Oil Corp and Samsung SDI Co.

In spite of the accomplishments that Citigroup has achieved in 2003, there are other banks, which also performed admirably in 2003. Standard Chartered has been aggressively expanding its loan team for some time and this has shown as it has moved steadily up the league tables over the past few years.

The UK based house has been involved in a large number of transactions this year including both flow and structured financings. One of its premier deals was the LBO deal for Yellow Pages in Singapore that attracted praise from all corners of the market.

Another emerging force has been DBS Bank, which has begun to build its team over the region as it expands out of its Singapore base. Its purchase of Dao Heng Bank in Hong Kong has allowed it to syndicated a number of deals for mid-cap credits - a sector that bankers in the SAR have been crying out for. In addition it is has had integral parts to play in many of the big name deals of the year including Hanaro Telecom, LG Philips LCD and Taiwan Broadband Communications.

HSBC is set to play the bridesmaid in the league table to Citigroup once again this year. It continues to dominate the Hong Kong market and there are signs that the synergies to be gained from the merger of its debt and loan teams are starting to bear fruit. The Kookmin Bank transaction, where it was able to provide the borrower with both loan and bond solutions, is just one such example of the extra firepower now at its command.

All of these banks will be looking to challenge for the top spot in the Asian loan market next year and Citigroup will have to be at its innovative best to hold onto its title in 2004.

Best Project Finance House


It has been a quiet year for project finance in the region as the market has continued moving away from the traditional models of financing infrastructure. Citigroup has been at the forefront of trying new methods and techniques and has been active across the spectrum of roles. It has arranged 12 deals in 2003, raising a total of $2.7 billion of which 11 were project loans and one was a project finance bond. It has completed six project finance advisories over the year for deals worth $4.6 billion. It has been involved in local currency deals in five different countries and has done deals in telecommunications, petrochemical, shipping, infrastructure and aviation sectors and eight different Asian countries. The roles it has undertaken on the deals it has been involved in comprise financial advisor, joint lead arranger, lead arranger, modelling bank, technical bank, ECA facility agent, escrow bank and ECA security bank.

While the deals it has been involved in are not perhaps the stand out deals of the year - it was not heavily involved in Nanhai Petrochemical, nor BLCP in Thailand or Pusan Newport in Korea - it has nevertheless kept a keen eye on the business. Competitors suggest that the bank has a lesser appetite for project work than in years gone by. But what is more likely to be the case is that the bank has little appetite to compete with local syndicates for deals in which the pricing does not make sense. For projects to stand the test of time, recent history shows that they have to make economic sense to all parties concerned. Cheap debt and few covenants lead to an inflexibility that can shatter in the face of changing circumstances. Citigroup understands this, participating in deals that make sense to not just itself but also to the sponsors, governments and markets that they are aiming to service.

Best Mid-Cap Equity House

BNP Paribas Peregrine

Best mid-cap house was one of the more hotly contested and closely judged awards of 2003. Both of the shortlisted contenders - BNP and CLSA - have strong franchises in what is often a lucrative and rewarding space of the market.

Our definition for mid-cap was those companies with a market capitalization of $150 million to $1 billion, give or take the odd hundred million. It incorporates rising stars that may become tomorrow's blue chips and also the well-defined strata of companies, which form the bedrock of most equity markets in the region.

We decided to give the award to BNP Paribas Peregrine on two counts. Firstly it has raised more by dollar amount than anyone else ($800 million) and secondly it has lead managed three of the most talked about deals of the year.

These are respectively: an $86 million IPO for Linhua Supermarket; a $313 million IPO for Weiqiao Textile and a $224 million IPO for Great Wall Auto. Each one of these deals develops a theme that BNPPP has tried to make its own - China as the world's manufacturing base.

They also reflect the firm's commitment to finding the best private sector companies in their space and deliver them to the market at a reasonable valuation. If investors make money, then companies will be able to return to raise fresh funds so the argument runs.

Linhua Supermarket was particularly interesting because it was the first equity offering out of Hong Kong after the SAR's scare started to die down. As such it represented a key test of market sentiment, which was delivered via an order book that closed 81.6 times oversubscribed on the retail tranche and 17.1 times on the institutional.

And having been priced at HK$3.875 per share, the company shot up to nearly HK$8 as of early December.

BNPPP followed its success with Linhua with Weiqiao, China's largest cotton textile producer. The deal was another roaring success, with retail books closing 120 times oversubscribed and institutional 25 times.

Rounding off the year came Great Wall Auto, the transaction that showed a new IPO mania was gripping Hong Kong. The $224 million deal attracted an order book of over $24 billion, more than half of one month's trading volume for the whole exchange. Retail books closed 670 times oversubscribed and institutional 60 times.

There is also more to BNPPP than being a pure Hong Kong operation. While being nowhere near as well diversified geographically as CLSA, the bank has been active outside of the Territory. In 2003 it completed seven deals in Singapore for the likes of DMX Technologies, Juken Technologies, Magnecomp International and Labroy Marine.

In Malaysia it raised funds for Salcon Berhad and TRC Synergy and in Indonesia completed a $32 million placement for Bumi Resources in December.

Best Small-Cap House

SBI E2 Capital

One firm dominates the Singapore market for small-cap equity deals this year, much as it has done for the last two years. SBI E2 Capital is a joint venture between Softbank of Japan, E2 Capital group of Hong Kong and Singapore management and is headed by Peter Choo, who spent 15 years with DBS bringing small companies to market.

This year the firm has done 15 IPOs, with a further two pending, representing 28% of the total IPO market in Singapore. The firm has raised some S$146.3 million for its clients over the year and brought some very well performing small-cap stocks to market.

Although Singapore can rightly be said to be the fastest growing small cap market in the world, SBI E2 Capital does not constrain itself to bringing Singapore small caps to market. It has done deals for Chinese and Hong Kong companies in Singapore and its affiliate in Hong Kong has done the same for other companies. It even very nearly completed the first ever listing of a Cambodian company, when it brought casino operator Nagacorp to market, a deal which was eventually held back by the regulators.

The company also makes a great effort to bring retail as well as institutional investors into its promising small-cap stable. It has pioneered a web-based distribution system for retail investors called, which places the shares it is selling on a first come first served basis at the offer price. It is establishing a dedicated research team to provide further coverage of its small-cap clients and is hiring more bankers to do more deals. As Asia's small companies seek listings and equity finance, so the dedication of an investment bank like SBI E2 Capital will give them the leg up they need to become the star companies of tomorrow.

Best Brokerage House/ Best Equity Research


UBS has defied convention by holding the top spot in Asian broking for well over three years. Normally, the top player has changed every couple of years, toppled by the latest firm to offer three year guaranteed bonuses. But UBS has stayed on top and shows no signs of giving its number one ranking away. Unlike it predecessors it has shown an ability to build an esprit de corps that is not simply about money and bonuses - although clearly that helps.

It has clearly engendered loyalty - as the staff retention figures clearly testify to. Its consistent ability to host one of the best fun boxes at the Hong Kong Rugby Sevens doesn't go amiss either.

This is all paying dividends for UBS as a firm, because thanks to the strength of its broking platform, it has tentacles into every major global account covering Asia and this is helping it greatly in not only winning primary markets business but also ensuring it outsells other bookrunners.

One sad loss was the departure of brilliant sales head, John Holland, who for personal reasons returned to London during 2003. He had been driving UBS's push into China, where the firm was the first this year to get a QFII license and execute trades in the local Chinese market. Luckily, for the firm, the bench is deep and Holland's shoes have been filled by others.

Its research is at the core of its broking excellence, and it continues to top all polls with a fair degree of comfort.

Best Fixed Income Research


This award is always based on the poll that we publish in our November issue. This year the poll received 435 votes from global investors in Asian fixed income, with Asian fixed income asset representing $304 billion. In a tight contest, Citi came out top on the blended score with 878 points, beating last year's winner UBS which scored 772. For more detail see the November issue of FinanceAsia magazine.

Best FIG House

Morgan Stanley

Even some of Morgan Stanley's fierce competitors told us they thought the firm was a shoe-in for this award.

On the M&A front it worked for the government of Korea selling Chohung to Shinhan, one of our deals of the year. This was but one of many FIG M&A trades, namely the $1.2 billion acquisition of KEB by Lone Star; the Prudential acquisition of Hyundai Investment Trust; the acquisition of Chekiang First Bank by Wing Hang; the Chinatrust acquisition of Grand Commercial Bank; and acquisition of 51% of BII in Indonesia by Temasek and Kookmin.

On the equity side it launched the first IPO for a China insurance company - a fairly phenomenal achievement given the level of pessimism on these companies only months before. However, its $696 million IPO for property and casualty insurer, PICC was a roaring success. One intelligent move on Morgan Stanley's part was to bring in AIG as a 9.9% shareholder and thus give fund managers confidence that a reputable name was comfortable with the company's risk controls and growth projections.

Of a similar size, the firm also launched a $600 convertible for Mega Holdings in Taiwan - the largest convertible in Asia this year.

On the DCM side, it launched lower tier 2 sub debt deals for Wing Hang Bank and Bumiputra-Commerce Bank, the only DCM transaction to emerge from Malaysia over the course of the whole year.

As if that were not enough, the firm has been busily acquiring NPLs and as part of its overall relationship with China Construction Bank signed a letter of intent with the Chinese lender to manage and resolve Rmb3.5 billion of NPLs.

A good year for Matthew Ginsburg and his team, and in terms of sheer market share it will be a tough one to match in 2004.

Best General Industries House

Morgan Stanley

And then there was GIG. The general industries group might be described by some as a loose grouping of any industry that isn't a bank, telecom company or a tech firm, but to Sheldon Trainor, GIG is where it's at. Trainor has been preaching the GIG gospel at Morgan Stanley for several years and since the tech crash, the old industries that make up the large component of GIG (such as oil, mining, power etc) have done very well.

Trainor's GIG group at Morgan Stanley has had another good year, and he has added to his team, with Deborah Mei now looking after the consumer retail businesses, particularly relating to China.

Key deals this year have included Morgan Stanley's $330 million IPO for China Resources Power, which is the first non-SOE power company from China to be listed overseas. Likewise, the firm advised on the $635 million asset injection of Maoming Petrochemical - a 380,000 tonne ethylene facility in Guangdong Province - into Sinopec.

The year began with the GIG group advising on the New World Group restructuring, the largest voluntary restructuring of a company in Asia Pacific - with the resulting newco, NWS Holdings seeing its share price go up 190% in nine months.

Also early in the year the firm completed the restructuring of the Zhuhai Highway 144a bond through a cash tender. It was the first successful restructuring of a PRC high yield issue.

Another of the year's prominent deals was the S$7.8 billion restructuring and S$3.8 billion recapitalization of Singapore Power, splitting off the transmission and distribution network off from the parent. This led to highly successful $2.2 billion bond issues in both Singapore dollars and US dollars, and was the largest Singapore dollar financing ever.

The firm also led a $144 million convertible for Wan Hai and a $50 million convertible for Panva Gas, as well as being part of the lead group in the IPO of Maruti Udyog, the leading Indian car company.

Best Telecoms House

Goldman Sachs

Telecoms has always been a core strength for Goldman and this year its roster of deals is impressive.

Starting big, the secondary offering for Chunghwa Telecom at $1.58 billion was one of the biggest of the year. No one pretends it was an easy deal to do.

But it was vitally important for the Taiwan government to get an ADR away, and coming out of SARs it was a great achievement to do just that and surprise the cynics who had long written off the possibility - indeed, one pessimist even bet FinanceAsia a bottle of Cristal champagne it couldn't be done (the '96 retails at $190 a bottle, in case you're interested).

Also in Taiwan, Goldman helped reforge the competitive landscape in the mobile phone sector through the merger of Far EasTone and KG Telecom - with ABN AMRO advising on the other side. In creating a third strong player, this deal got past family pride and rivalries and has given Taiwan a unique position in global telecoms - where three mobile companies each hold exactly a third of the market each.

In China it helped Nokia reorganize it mobile manufacturing operations and merge them into a single operation - the largest ever consolidation of a foreign investment enterprise in China.

In India it advised Hutchison on the acquisition of regional networks in Haryana, Rajasthan and Uttar Pradesh East.

In Malaysia, the longstanding merger between Celcom and Telkom Malaysia finally closed - creating a second major player in the market to compete with Maxis. Goldman advised Celcom.

And in October, Goldman advised Deutsche Telekom on its sale of its 24.8% stake in Globe Telecom in the Philippines for $472 million.

In Indonesia, Goldman also worked with Indosat on its $300 million bond, part of a vital refinancing package that will help Indosat better compete with Telkomsel in the cellular area.

And as the year was about to close, China Mobile announced it would buy five more networks in China from its parent, with Goldman acting as the adviser on what is expected to be a $5 billion deal

Best Tech House

Goldman Sachs

In the absence of much tech M&A, we turned back to the equity markets to find our tech house of the year. And here it was Goldman that was dominant with its usual plethora of transactions from Taiwan, plus interesting new offerings from Malaysia and India.

The two largest tech trades of the year were both for TSMC, Goldman's most cherished client in the Island Republic. Both deals were huge successes.

With its $945 million trade on behalf of the government in July, Goldman generated over $2 billion in demand and introduced 164 new ADR investors to TSMC's stock, while pricing at a tight 0.67% discount to spot off a share price that was at a 94% high of 2003. Later in the year it was back selling a $1.077 billion offering on behalf of Philips and this time managed to go one step further, pricing flat to the ADR's close.

Likewise it completed a roster of well-received offerings for ASE, Benq, Nan Ya, Acer, Hi Tech and Delta.

Elsewhere in the region, it jointly led the $532 million IPO for Astro, which also won our award for best Malaysian capital markets deal of the year. And from India came an innovative $293 million secondary offering for Infosys, which was the first to use a tender process under new SBI regulations.

Finally on the M&A side, Goldman also advised on the $450 million tie up between Thomson and TCL. The deal, which has yet to close, represents a landmark in the sense that it shows the determination of Chinese companies to forge global brands. In this instance, the partnership should create a major global leader in the TV/components sector.

However, while Goldman wins the tech award, it has come up against stiff competition from Morgan Stanley and ABN AMRO. Like Goldman, Morgan Stanley has also been active in Taiwan ECM, though mainly on the equity-linked side. But a greater threat is posed by ABN, which is developing an ever stronger franchise in Taiwan and often by taking Goldman clients. Twice this year, it has taken deals that Goldman would normally assume to be its own - a $450 million convertible for Hon Hai and a $200 million convertible for ASE.

2003 Private Banking Model Portfolio Game

Winner: Credit Suisse Private Bank

There is a saying that goes "the proof is in the pudding", and we put that maxim to the test when we asked a selection of private banks to create portfolios last year. We gave each a notional $5 million and allowed them to trade the portfolios once each quarter, with an independent valuation given by a referee. The idea was to see if the private banks lived up to their promises and actually delivered excellent investment results. The first year of the game has been won by Credit Suisse Private Bank which with a return of 23.5% turned out an excellent performance in what looked initially to be a dreadful year (SARs, Iraq) but which turned out to be relatively good. Credit Suisse Private Bank outperformed thanks to making the intelligent investment calls on improving equity markets, a weaker dollar, and on gold.

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