Things are looking up

Within just a few short days, the issuing environment for Asian equity and debt has improved dramatically.

It's strange. I always thought that unemployment was a bad thing. But for cash-strapped Asian equity and debt issuers, last Friday's US unemployment figures were a real shot in the arm. The May figures showed that the jobless figure rose to 4.1% and that the number of non-government jobs fell for the first time in four years.

The markets have reacted with surprising alacrity. And now bankers and their issuing clients really believe that their deals can get done. This is a huge relief after nearly a month when the markets were closed to all but the best issuers or the cheapest deals.

So far, it has been a truly remarkable week in the US corporate bond market with nearly $15 billion being raised by such debt market luminaries as Ford Motor Credit, International Paper, Hewlett-Packard and Morgan Stanley Dean Witter. It is now only a matter of time before Asian corporate bonds get a similar reception from yield-hungry, credit-happy investors.

Not to be left behind by their credit cousins, Asian equity capital market teams have sprung back into life with talk of resuscitated deals. Apart from the beleagured ColbyNet, a stream of new economy offerings are coming to market with every chance of meeting good investor appetite. Silverline Technologies - another Indian software superstar - may be first. Phoenix Satellite Television has sent its suit to the drycleaners for a roadshow beginning tomorrow. Even the market-savvy Korean Development Bank is rumoured to be selling the second-last tranche of its stake in Posco through a $550 million deal starting next week - showing that there is even appetite for old economy steel stocks.

TSMC's $1.1 billion offering at the end of last week was a stellar success. And with China Unicom next week set to price what will probably be the biggest equity deal of the year, June could be one of the best capital raising months of the year. Who would have thought it, this time last week?

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