When a year ends with volatility, it can sometimes be hard to remember the periods of calm that came before. When a year ends with uncertainty about what comes next, it is easy to forget that the going was often good. Sometimes very good.
The best news in 2016 came from the explosion of Chinese outbound M&A. Chinese buyers had announced $218.6 billion of offshore deals by the time this magazine was published in December, a whopping 113% higher than 2015, according to Dealogic data.
These deals dominated conversation, ranging from blockbuster transactions like ChemChina’s $43 billion offer for Syngenta to small, but politically significant deals like Shanghai Electric’s acquisition of K-Electric in Pakistan.
There is some debate about how much these deals are driven by fear about an economic slowdown in China, as well as how long the boom will last, but there is little doubt Chinese buyers have rapidly changed the face of M&A globally.
Asia’s bond markets did well, bouncing back after a rare blip in 2015, when Asia ex-Japan G3 volumes fell to $197.2 billion, according to Dealogic. They roared back to $225.2 billion this year, setting a new record and showing that the great expansion of credit in the region is far from over.
Primary equity issuance in Asia struggled. IPO volumes fell to $59.4 billion in the region, and $21 billion in Hong Kong.
The blockbuster deal of the year was Postal Savings Bank of China’s $7.4 billion listing in Hong Kong. But this deal was as controversial as it was successful, providing a palpable example of how much cornerstone investors have changed the dynamics of Hong Kong’s new listing market.
Asian investors, executives and bankers can look back on a year that was at times difficult, but that was ultimately productive. Bond markets grew. Equity markets were grounded. And M&A, thanks to China, soared skywards.