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| potential of the IPO market in 2010 |
Asia’s top investment banking franchises are concentrating on China in 2010, according to senior capital markets bankers in the region. The country has accounted for an ever-increasing share of investment banking revenues in Asia in the past few years, and this year the trend is set to continue. "We are likely to see $50 billion to $60 billion-worth of IPOs executed in 2010," says Steven Barg, head of global capital markets, Asia, at UBS, "with a strong contribution from the continuing privatization of state-owned enterprises in China."
According to data from Dealogic, mainland China accounted for just over 50% of the investment banking fee pool for Asia-Pacific ex-Japan in 2009. Equity capital markets accounted for 63% of fees, with M&A 21% and debt just 16%. If China’s state-owned banks are as active as expected in 2010 in capital-raising via IPOs and follow-on issuance, there is likely to be a similar emphasis on China as the key country and equity as the key asset class for investment banks hoping to top the year-end league tables.