Day 5: Awards for Achievement 2007

Today we announce our major House Awards, including Best Investment Bank.

In July, FinanceAsia recognised Citi as the best foreign commercial bank in nine countries in the region û a sure sign of dominating the industry. We havenÆt changed our minds in six months.

The bank has undoubtedly achieved the most, both in the field of commercial banking and investment banking over the past year. Citi has a presence in over 17 countries and employs over 10,000 in its markets and banking businesses. Its sales and trading staff of 1,200 provide liquidity and solutions to one of the region's broadest array of clients.

On the investment banking side, landmark deals in 2007 included advising Asian clients such as Doosan, Acer and Wipro on major overseas acquisitions. Indeed, Citi leads the announced M&A league tables in both South Korea and Taiwan, countries where it is willing to put its balance sheet to work.

On the primary side, Citi led on sovereign deals for Pakistan, the Philippines and Indonesia but it also has corporate relationships that span the region. The firm is embedded in Asia's financial markets, and collects, holds, invests and disburses currency, documents, stocks and bonds for clients - handling 400,000 transactions valued at $40 billion in the Asia-Pacific region every day.

Citi is also becoming a growing force in wealth management in the region, helped by its well-entrenched branch network, history of operating in the region and relationships forged via years of providing commercial and investment banking services.

In the past 12 months it has launched prime brokerage services in Singapore, expanded commercial banking operations in Indonesia and has begun offering securities and fund services in Vietnam. In Taiwan it announced the completion of the acquisition of Bank of Overseas Chinese, which will help it grow its customer base across the country, most notably in the SME space. This is more proof that the firm continues to position itself to profit from the continued rise of Asia on the global front.

CitiÆs recent announcement that an Asian would lead the charge as global CEO is perhaps the strongest signal the bank can send that it believes in the region, its people and its potential.


UBS proved this year that Asia is more than a two-bank region when it comes to well-rounded, high-quality investment banking. During the past five years this award has gone to either Goldman Sachs or Morgan Stanley. But this year we were struck by how well UBS gauged what would drive investment banking deal flow during the year.

Making this decision wasnÆt easy because in some sense each of the contenders has excelled in what the banks set out to do û but UBS stands out as a key player in two emerging themes of 2007: the booming equities market in greater China and the rise of outbound M&A across the region. And by giving UBS this award we are recognising both the importance of those trends and the fact that UBS spotted them and was well-placed, in terms of allocating resources and capabilities, to act on them.

Another check for UBS is that its team didnÆt limit itself to the low-hanging fruit in China. It was on key deals out of Korea, and Southeast Asia, and was especially early to see the India outbound M&A story. It was willing to back Indian companies that did not have a track record of such deals behind them but had high-flying ambitions.

The firm was not only very active in equities, completing 74 offerings during the time under review, it was also on key IPOs in China because it made the right calls. UBS received authorisation to underwrite domestic Chinese equity offerings in February when its investment in Beijing Securities was finalised, which enabled it to price PetroChinaÆs $8.9 billion A-share IPO. It was also joint global coordinator and bookrunner on Country GardenÆs $1.9 billion IPO and Fosun InternationalÆs $1.48 billion IPO, both in Hong Kong.

Sure, that momentum has come with some criticism regarding execution û but any company so eager and aggressive to make its mark will always encounter such problems. Overall, we feel that the slip-ups do not counterbalance the targeted aggression the bank has shown.

The Swiss firm has dominated M&A league tables for most of the year û with a broad geographical spread of mandates. It completed 33 transactions in the period under review.

And across both debt and equity, UBS has a number of firsts to its credit. On the debt capital markets front, UBS û like its competitors û largely focused on better fee pools, but also acknowledged the need to have a strong DCM team to be considered a well-rounded bank; and thus it completed deals in six of 11 markets in the region.

This year, making a mark in China mattered; but it shouldnÆt, and for UBS didnÆt, come at the expense of the rest of the business. Recognising outbound regional M&A trends put the bank at the cutting edge of the industry and showing up on such a wide spread of deals meant it was a firm that no one could ignore, including us.

Lehman Brothers

This year, Lehman Brothers executed major transactions for clients in China. It was joint bookrunner on SinopecÆs convertible bond, which was the largest international CB by an Asian issuer and joint bookrunner for China Citic BankÆs concurrent IPO in Hong Kong and Shanghai. Demonstrating its commitment to the region, the firm established an office in Shanghai in January and is now one of the top providers of US dollar assets into ChinaÆs foreign reserves.

Lehman is also establishing a presence in the fixed income space. It was one of few players to bring high-yield issuers to market during the difficult summer months when it successfully raised money for both Mobile-8 and Davomas.

In India, it was the senior lead manger on DLFÆs $2.2 billion IPO, which was the largest-ever IPO in India. In addition, it has built up its India franchise through a neat ômake and buyö strategy. It has also been on a hiring spree û its team now includes 140 people, which is head and shoulders above last year. As its own bankers said in the pitch meeting: ôThis time last year we were at a standing start in India.ö

Indeed, hiring is a key part of Lehman brotherÆs efforts to build momentum and it believes the firmÆs strong culture is one of the reasons it has been attracting top-notch bankers. The firm has brought on board more managing directors in 2007 than in 2004-06 combined. The headcount in Asia has jumped from 1,520 in 2005 to 2,700 this year. Now just because you hire doesnÆt ensure success but it does show that people want to work for Lehman Brothers in Asia and that they recognise its growing importance in the region.


UBS consistently maintained a top three position on completed M&A deals during the year, no easy achievement as Asian M&A finally came of age and a number of blockbuster transactions closed.

Other aspirants for this award took pot shots at some of their competitors on grounds that positions in the league tables were derived from delivering fairness opinions or ôaccidentalö inclusion on deals or by virtue of providing financing. But even this criticism could not, with any degree of truth, be levelled against UBS; the Swiss bank had a genuine advisory role on some of the yearÆs leading transactions. And some of the transactions it advised on were landscape-defining deals for the region.

UBS had a stellar year in India, a highly active M&A market in 2007 measured in terms of both total number and aggregate size of deals. UBSÆs India coverage team this year deserves kudos for both identifying and being part of this activity. And UBS leads by a comfortable margin in India - that too, despite the fact that it played no role on Tata SteelÆs takeover of Corus. To UBSÆs credit it still won advisory mandates for a number of India outbound deals that followed. UBS also advised Vodafone on the Hutchison India acquisition, the largest India inbound deal this year.

We concede that it may have played to the advantage of UBS that neither Goldman Sachs nor Morgan Stanley was fully operational in the country, having changed their India coverage model over the recent past. But India alone could not account for this position. UBS is also number one in Hong Kong and has closed deals in Singapore and South Korea, countries which continued to see M&A deal flow this year.

Weaknesses in UBSÆs M&A coverage this year were China and Malaysia. But China has been primarily an equities story this year. M&A was peripheral to success in China and few advisers have a significant roster of closed deals. And Malaysia was dominated by local banks so UBS did not lose significant ground to its competitors.

2007 may well be remembered as the year Asian companies emerged on to the global arena and it is already apparent that we have only skimmed the surface of this particular wave. And thus, 2008 could be a completely different story in terms of which investment bank dominates M&A advisory. But with this award, we recognise that UBS set the gold standard for 2007.

For more house awards, please go to the next page...BEST EQUITY HOUSE
Morgan Stanley

In a year where AsiaÆs primary equity markets have û once again û racked up record volumes, it is hard to find an ECM team that hasnÆt been extremely busy. In this environment, it is critical be able to spot the right trends and the companies that define them.

This year the equity story that more than any other has grabbed the headlines is the rise of ChinaÆs entrepreneurial firms, which thanks to increasing market valuations now span the entire spectrum from small- to large caps û even before they complete their IPOs.

Morgan Stanley was an early mover in this arena and has been a consistent force when it comes to seeking out sector leaders û using its balance sheet when needed û and bringing them to the attention of global investors. Private sector property companies were already a focus, but in 2007 the bank has also stepped up its game within the retail and metals & mining sectors.

It has also consistently managed to command premium valuations for its clients, while keeping prices in line with fundamentals to ensure a solid aftermarket performance. In this respect we feel Morgan Stanley has repeatedly outshone the competition. The confidence clients have in its execution abilities is obvious from the fact that the bank acted as stabilisation agent on 10 of the 13 IPOs where it was a joint bookrunner.

The US investment bank tops the ECM league tables for China and is neck in neck with Goldman Sachs and UBS for IPOs and follow-ons across the region û a position achieved by its willingness to apply resources on high-profile contested blocks as well as smaller deals for growing clients. And while China has its unrivalled attention, the firm has also completed deals in Hong Kong, Singapore, Korea, Taiwan and India, making it by no means a one-market player.

Admittedly, the bank has had a weak year in India as it was hampered by the lack of a domestic license, but a focus on offshore business yielded joint bookrunner mandates on ADRs for both Sterlite and HDFC, which raised a combined $2.6 billion.

But letÆs face it, China has accounted for 40% of regional ECM volumes and 64% of IPO volumes, so getting China right is critical for a bank that wishes to have a strong Asian equities franchise. Of the 10 largest IPOs in Asia this year, nine are from China and of those Morgan Stanley acted as a bookrunner on six, including

True, the firm doesnÆt yet have a licence to underwrite A-share issues, but given that it is entitled to one third of the revenues generated by CICC in this market it is hard to argue that this in any way detracts from the fact that Morgan Stanley is a key player in the biggest and most important equity market in the region.


This turned out to be one of the easiest awards to hand out this year, thanks to JPMorganÆs dominance in the league tables. As of November 30, the bank had been involved in raising $4.5 billion for equity-linked issuers across the region û twice as much as Citi in the runner-up position. It also arranged more transactions than any other bank with 19, including six on a sole-book basis, and brought issuers from eight countries to the market.

This alone wouldnÆt have been enough to take home the award, but the bank has also demonstrated solid execution capabilities and a willingness to think out of the box.

The latter is exemplified by the S$1 billion ($655 million) CB it did on a sole book basis for CapitaLand, which achieved the longest maturity ever for an Asian CB with a 15-year/10-year put structure. It also acted as joint bookrunner on two of the largest equity-inked transactions this year in the form of the $1 billion offering for Reliance Communications and KhazanahÆs $850 million sukuk exchangeable, and single-handedly ran the books on KCCÆs $1 billion triple-tranche exchangeable out of Korea.

The bank has also consistently shown its skills in terms of reading the market and getting the price right, allowing the bonds to trade up in the secondary market. It also hasnÆt had to re-offer any bonds below par.

Deutsche Bank

Privately-owned entrepreneurial firms continued to outweigh state-owned enterprises in terms of the number of new Chinese listings outside the mainland this year. But while in previous years most of these companies were found in the mid-cap segment of the market (issue sizes between $100 million and $300 million, according to our definition), 2007 was a year when rising market valuations saw a large number of them grow into large-caps while they were still preparing their initial public offerings û reducing the overall pool of mid-cap issuers somewhat.

But there was still a lot of activity û out of China and elsewhere - and one of the banks that captured this best was Deutsche Bank, which led 10 mid-cap IPOs, five follow-on primary offerings, five convertible bonds and 1 pre-IPO CB. Having helped Asian mid-caps in eight major industries to raise more than $4 billion, the bank has also better than the competition managed to navigate the pricing issues, allowing the majority of its IPOs to trade up in the weeks after listing.

Two-thirds of the deals it brought to market were for companies based in China or India û the two key markets for equity issuance û but the bank also led transactions for clients in Hong Kong, Singapore, Taiwan, Indonesia and the Philippines, resulting in a good geographical spread.

From China it helped Longtop Financial Technologies to achieve the first off-shore listing for a Chinese IT solutions provider to the banking sector and Kingsoft to become the first Chinese online gaming company to list in Hong Kong. In India it put its own balance sheet to work in the structuring and acquisition of a $200 million CBs for Suzlon Energy in the middle of its takeover battle for Repower and then increased the fundraising for the company by offering another $100 million of the same bonds to the market. In Taiwan it completed a $300 million pre-IPO CB for Taiwan High Speed Rail, which achieved a zero coupon and was partially sold into the public markets û a clear example of how the bank strives to get a foot in early and provide the necessary financial support that will allow its clients to grow.

DBS Bank

DBS retains its title for bringing small-cap companies to market thanks to its strong execution capabilities. Indeed, most of DBSÆs IPOs in Hong Kong in 2007 have generated strong and positive first day and aftermarket performances. While this year has been an odd one for aftermarket performance with some well known companies trading through on the first day, such references remain a benchmark.

DBS was lead manager on the IPO for footwear retailer Walker Group in June that was up 17% in the first day of trading, and similarly Global Sweetener, another company that it led the IPO for gained 6% on the first day

The firm retains just about 17% market share of the Hong Kong small-cap (representing issues sizes of less than $100 million) IPO segment this year.

It has also been a very busy year for secondary fund-raising activity and DBS leads in this segment too, giving it a combined 10% share of Hong Kong IPOs and secondary share offers. Funds raised by way of placements in 2007 increased by 43% as compared to 2006. DBS accomplished 13 small-cap placements this year, up from two last year. An example of its outstanding execution is that it successfully launched four placements in the space of three days to capture optimal market conditions.

Please go to the next page for more house awards...BEST INTERNATIONAL BOND HOUSE
Deutsche Bank

ôItÆs not all about the league tables,ö or so bankers this month have been telling us ad infinitum. And indeed it isnÆt. The winner has demonstrated a presence on many of 2007Æs key deals, an ability to deliver results in testing markets, as well as capabilities in the more challenging high-yield sector that we felt merited recognition with this award.

A feature of 2007 has been the frequency of jumbo bond offerings (over $1 billion), and Deutsche Bank has played a role in eight of the 13 transactions executed this year. These include the widely-praised $2 billion transaction from ICICI in January, as well as the Indian bankÆs $2 billion deal in September, winner of FinanceAsiaÆs 2007 investment-grade bond award.

The bank also co-led two of the yearÆs biggest bank capital raising deals, namely DBSÆs $1.5 billion transaction (winner of our bank capital raising award), and Woori BankÆs $1 billion deal. The bank also co-managed three of the four sovereign deals this year.

However, a key differentiating factor was its strong high-yield performance. Deutsche Bank closed four sub-investment grade transactions in 2007, in a tie with JPMorgan, and showed broad diversity across sectors (transport, telecom, and real estate) and geographies (China, Hong Kong, Indonesia and Thailand).

It also succeeded in bringing one of the few high-yield deals to market over the summer, managing True MoveÆs $250 million transaction, receiving praise from investors and rival syndicate bankers alike for a clean and quick execution during difficult market conditions. Chinese property developer Neo-China HoldingsÆ $400 million transaction was also noteworthy for its rare bonds-with-warrants structure.

The bank was present on Lai Fung when the high-yield sector made its comeback in March after the market hiatus in February. It was also at the ready when markets had stabilised enough to allow ICICIÆs $2 billion transaction to open the market after weeks of volatility.

For these reasons, we believe that Deutsche Bank merits this yearÆs international bond house of the year.


Banks that had positioned themselves to ride the high-yield wave this year must have found themselves all dressed up with nowhere to go. But present on the most number of deals - in a tie with Deutsche Bank - was JPMorgan. After bulking up its team with a succession of new hires from London and New York, JPMorgan sprang to life in April with Indonesian shipping company Berlian Laju Tanker's maiden transaction, which closed 23 times oversubscribed on the original deal size. The deal marked the largest Indonesian high-yield with the lowest coupon.

On the same day, JPMorgan managed a transaction for Indonesian coal miner PT Indika Inti Energi (see Best High-Yield Bond award). The deal was creatively structured to work around Indika's sub-50% interest in its main asset, allowing the deal to attract 170 investors and achieve the lowest coupon and spread for a B2/B-rated company at the time.

By May, the bank was back again, when it brought Chinese property developer and toll-road operator RoadKing to market with a dual-tranche transaction. The deal incorporated the second only high-yield floating rate note in the Asian high-yield bond market, and a rare short-call option. The option was structured to coincide with the company's plan to spin off part of its business through an IPO in 2008, allowing RoadKing to repay the FRN at that time. This would also enable the bonds from the outstanding tranche to benefit from a ratings upgrade.

That same month the bank managed China's Parkson Retail's $125 million bond, which garnered $1.6 billion in demand, or a level of oversubscription of 13 times, and priced within a 36-hour window.

Its presence on so many deals in such a short time made JPMorgan's competitors nervous for a while. But the bank did not return to prove its capabilities to manage high-yield public deals during the difficult summer months, as did Deutsche Bank and Lehman Brothers. However, investors who spoke to FinanceAsia felt that JPMorgan pipped Deutsche Bank at the line with the degree of aftermarket support it provided for its issuer clients. That, together with the degree of innovation the bank brought to its transactions, marked it out for this year's award.

Standard Chartered

HSBC may be the "world's local bank" but based on league tables, Standard Chartered leads in terms of total Asian currency volume, and ranks first in five local currency markets (Thailand, Indonesia, Philippines, India and Singapore), while HSBC holds the number one position in just two markets (Hong Kong and Malaysia). Other figures show that in terms of number of deals by business sectors, Standard Chartered is ahead of HSBC in 11 sectors, while HSBC is ahead in six. The banks have equal ranking for Islamic financing, but Standard Chartered leads in asset-backed securities and public sector transactions.

Furthermore, Standard CharteredÆs market share growth has continued in key markets such as Hong Kong (12.6%), Singapore (36%), India (68.5%) and Malaysia (93%). The bank is noted for its presence in Pakistan, where it handled the countryÆs largest and longest sukuk issue for Water and Power Development Authority. The issue was the first to achieve sub-Kibor pricing in the local market.

Standard Chartered also managed Asia Commercial BankÆs Vnd2.25 trillion ($142 million) five-year deal, which achieved the tightest pricing yet for a Vietnamese corporate bond issue, and completed the largest securitisation in Asia ex-Japan with Korea First Mortgage Number 7Æs $1.3 billion residential mortgage-backed deal. The bank has also repeatedly been nominated by the Asian Development Bank for a succession of offerings in Singapore dollars, Malaysian ringitt, and Philippine pesos.

HSBC has also done some very nice deals, but we feel that the capabilities displayed by Standard Chartered combined with its dominance in the local markets merits this award.
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