The rise of Chinese securities houses in the offshore capital markets is one of the defining stories of the decade.
Foreign banks may grumble about fee compression and crowded bookrunner lists, but most admit the movement is inexorable. Chinese securities houses have quickly risen from relative obscurity to near-dominance — and Haitong International Securities has risen most impressively of all.
Haitong’s strong performance in ECM is no secret. The firm won an eye-catching 68 deals in Asia Pacific over the last year, according to Dealogic. That was two more than ECM powerhouse Morgan Stanley, although the US house boasted much larger deal sizes.
In Hong Kong’s ECM market, Haitong lost out on the top of the 2016 league table by just $1.02 million, placing more than three times as many deals as the top-ranked Goldman Sachs.
It helped manage a plethora of bank listings in the awards period, including China Zheshang Bank’s $1.94 billion listing and the crowded IPO of Postal Savings Bank of China, a $7.4 billion transaction that was awarded to an extremely large 26-strong syndicate.
Although Postal Savings Bank’s deal was easily the largest Hong Kong listing, Haitong should get more credit for a pair of smaller IPOs. China Securities and Orient Securities, two domestic rivals to Haitong, could not question the firm’s offshore strength. It won a bookrunner mandate for both listings.
Lin Yong, Haitong International Securities
For most securities houses, the story would stop there. An impressive run in primary combined with a strong secondary presence — what more could a securities house want? In Haitong’s case, this answer is quite a lot more. It has now muscled into the debt business as well.
Haitong drew attention in the first quarter of the year, topping the high-yield league table with an apportioned $1.56 billion of deals. This no doubt went a long way to helping it generate more fees than any other firm in Asia Pacific ex-Japan during the first quarter, according to Dealogic, which said the securities house brought in $110 million.
It has not dominated the Asia ex-Japan high-yield market as clearly in the intervening months, being muscled from the top after a strong performance by Credit Suisse. But the fact that Haitong is comfortably in the top 10 of the high-yield league table — in second place no less — shows just how far it has come.
Hong Kong’s growing base of mainland securities houses still have a few lessons to learn from their global rivals. But after a stellar performance across asset classes, Haitong and MD Lin Yong have proved it is undoubtedly best in class.