Credit Suisse investment bank expects fundamental growth and election events to underpin equity capital markets activities next year.
Southeast Asia's equity capital markets (ECM) have seen a healthy flow of initial public offerings (IPOs) between 2015 to November 2018, except for IPO volumes, which saw a decline in this year.
According to data from financial markets platform Dealogic, Credit Suisse topped the rankings for equity and equity-linked transactions in Southeast Asia (SEA), where it was involved in 44 transactions, raising $14 billion in six core SEA countries.
General Market Volatility
«Credit Suisse’s close collaboration between private banking and investment banking has been a strong contributor of the success we’ve achieved in capturing a significant share of the entrepreneur-led activity in Asia Pacific,» Credit Suisse's Edwin Low said in an email interview with finews.asia.
The general market volatility of 2018 may have prompted investors to put their monies into better names, said the co-head of investment banking & capital markets, Asia Pacific.
«In the current challenging market environment, we are seeing a stronger investor preference for investment grade (IG) credits. Our private bank clients, for example, would prefer a lower-tier subordinated bond from a well-known quality credit, over a higher yield bond from a relatively lower credit issuer,» noted Kuan-Ern Tan, head of Singapore investment banking & capital markets, Credit Suisse, at a recent media briefing.
Politics Provide Catalysts
Despite the slower market activity due to volatility this year, the bank expects politics to be a significant factor impacting deal flow for the region next year, as Indonesia and Thailand enter into their election year. Hence, the elections in Indonesia and Thailand could present similar situations.
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