Standard Chartered has promoted Aaron Gwak to head its capital markets business across the Asean bloc as activity in the region belatedly begins to pick up, the Asia-focused British bank said on Thursday.
It's been a soft start to the year for investment banks with revenues from debt capital market transactions in the Asia-Pacific region, excluding China, totaling just $534 million in the four months to end-April, the lowest for that corresponding period since 2008, according to Dealogic.
But signs of a revival are slowly emerging after TMB Public Bank sold a $300 million bond on March 23, becoming the first major Thai bank to issue dollar-denominated debt since 2014.
“We’re now starting to see issuance, albeit slowly, start to pick up again,” Henrik Raber, StanChart’s global head of capital markets, told FinanceAsia. “So far all the big transactions that have materialised have been G3.”
StanChart was a global coordinator on the TMB deal.
Gwak succeeds Lynette Ortiz who is returning to the Philippines to assume the role of head of international corporates and financial institutions in the country. Both appointments are effective June 1.
Raber said he attributes the shift in investor sentiment to the US Federal Reserve’s decision in March to put any further interest rate hikes on hold.
He also singled out debt capital markets in the Philippines for special praise, playing down the potential for disruption as a result of next week's presidential and legislative elections.
“The brightest shining light for us is the Philippines. There we have pretty vibrant G3 issuance but a very active local market,” Raber said. “Investors tend to take things into their stride. Emerging markets tend to be volatile when politicians change but long term they tend to do pretty well.”
The front runner is Rodrigo Duterte, also known as “the Punisher”. He was mayor of the southern city of Davao for two decades, where he drastically reduced crime. However, human rights groups accuse him of allowing vigilante death squads to carry out hundreds of extrajudicial killings.
"Regardless of the victor, the new administration will inherit a country that is in the best shape in decades," said Trinh Nguyen at Natixis on Thursday in a research note.
In contrast, Raber saw China's DCM boom giving up a little.
“The onshore conditions have changed pretty significantly since hitting a low in January; spreads have widened and some deals have been cancelled,” Raber said.
China DCM revenue in the year to end-April almost doubled year-on-year to $885 million, on the back of record breaking onshore corporate bond deal volume and activity from Chinese issuers.
Ortiz, meanwhile, moved into the role as head of Asean capital markets only last April.