ASIA-PACIFIC, excluding Japan, generated an estimated US$4.4 billion worth of investment banking (IB) fees in the first quarter of 2024, down 29 per cent on the year, despite a global gain.
This logged the lowest Q1 figure in the region since 2016, based on a report by the London Stock Exchange Group (LSEG) released on Friday (Apr 5).
IB fees in Japan were also down 24 per cent to US$1 billion. Global IB fees, however, rose 2 per cent to US$27.6 billion, driven by Americas and Europe, which gained 18 per cent and 5 per cent, respectively.
Amid a lacklustre IB climate in Apac, excluding Japan, China’s state-owned investment company Citic took the top position for overall IB fees in the region with a total of US$245.9 million. It accounted for 5.6 per cent wallet share of the total Apac IB fee pool.
Equity capital markets underwriting fees were down 57 per cent on the year to US$688.4 million in the region, the lowest period since 2013. Its debt capital markets fees grew 1 per cent to US$2.8 billion, while syndicated lending fees declined 46 per cent to US$523.6 million, as compared to Q1 2023.
The estimated advisory fees earned from completed mergers and acquisitions (M&A) transactions were also down 54 per cent on the year to US$353.1 million in Apac excluding Japan.
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M&A deal-making marks lowest first quarter total since 2013
Deal-making activity involving the region amounted to US$127.9 billion in Q1 2024, down 20.9 per cent year on year, the lowest first quarter total since 2013. Target Apac M&A witnessed transactions worth US$113.5 billion, down 21.9 per cent from a year ago, based on LSEG’s data.
Most of the deal-making activity involving Apac targeted the materials sector, which accounted for 16.3 per cent market share worth US$20.9 billion. This is however also down 39.5 per cent from Q1 last year.
Industrials sector at 15.1 per cent market share saw US$19.3 billion worth of the deals, down 30.6 per cent on the year. Consumer products and services captured 12.7 per cent market share worth US$16.2 billion, up 41.9 per cent from a year ago, followed by high technology sector that captured 10.4 per cent market share.
Private equity-backed deals targeting Apac increased 12.4 per cent year on year to US$24.6 billion. It is the highest start to the year since 2022.
China stood as the top target nation for M&A with US$54 billion worth of deals.
Equity market continues downturn
The region’s equity and equity-related issuance in Q1 2024, raising US$34.8 billion, continued its downturn started in 2022 and fell to a 15-year low.
While the issuance value was 45.3 per cent lower than the corresponding period last year, the number of equity issuances declined 10.6 per cent.
India accounted for 42 per cent of the region’s equity capital market proceeds, followed by China with a 21.4 per cent market share.
The region’s initial public offerings (IPO) raised US$6.9 billion, down 58.4 per cent from a year ago, while the number of IPOs fell 22.5 per cent.
While Apac IPOs accounted for 32 per cent of the global IPO proceeds, Chinese IPOs captured 14.6 per cent, raising US$3.1 billion, down 78 per cent from a year ago.
Follow-on offerings fell to a four-year low and totalled US$26.2 billion, down 31.6 per cent from a year ago. Convertible bonds raised US$1.7 billion, down 80.6 per cent year on year.
Citi currently leads Apac’s equity capital market underwriting rankings with 10.7 per cent market share and US$3.7 billion in related proceeds, said LSEG.
Bond market stays bullish
Primary bond offerings from Apac-domiciled issuers raised US$951.9 billion in bond proceeds in the first quarter of 2024, up 2.7 per cent from a year ago, the highest start to a year since 2022.
China accounted for 78 per cent of Asia-Pacific bond proceeds worth US$742.1 billion, up 2.7 per cent from a year ago. South Korea followed with 8.4 per cent market share as its bond proceeds grew 17.7 per cent to US$80.1 billion. Australia and India accounted for 5 per cent and 2.6 per cent market share, respectively.
Bond offerings from the financials sector captured 37.9 per cent of the market share, amounting to US$361 billion, up 21.2 per cent from the previous year. Government and agencies accounted for 37.7 per cent of the region’s bond proceeds and totalled US$358.4 billion, down 17.0 per cent compared to year-ago period.
Industrials rounded out the top three sectors with an 9.8 per cent market share worth US$92.8 billion, up 25.1 per cent on the year.
China’s Citic leads the Asia Pacific-issued bonds underwriting, representing 6.5 per cent market share with related proceeds of US$61.4 billion.
