Finance: Transformation stories in Asia, CEE and Africa
Banking and capital markets in Asia, central and eastern Europe and Africa have been transformed over the last 50 years, but the change in Asia is particularly breath-taking.
In 1990, Japan made up 45% of global equity market capitalization and its three long-term credit banks had a market cap of $140 billion. The top 50 US banks at the time were worth just $110 billion combined.
How things have changed.
Today China dominates the region and the biggest challenge that all market participants face is how to position correctly for an opening up of the country’s markets and an investment banking environment where Chinese players have become so powerful.
With its large population and growing mass-affluent, young middle class that has been underserved by the banks, China has also led the incursion of tech-savvy non-banks into the payments space. It is the true home of digital disruption; firms such as Ant Financial and WeChat now have global influence.
Asia’s ability to adapt has seen its capital markets recover and flourish since the crushing financial crisis that began in 1997. There were $300 billion of Asian credit bonds 10 years later in 2007 – today there are $1.7 trillion.
The region has also been a pioneer in the increasingly important private markets: Alibaba’s $14 billion private equity placement was the largest in history and bigger than most IPOs.