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M&A banking fees in Asia-Pacific fall to 8-year low in Q1: report

BANKING fees from mergers and acquisitions (M&A) transactions in the Asia-Pacific, excluding Japan, fell to an eight-year low of US$473.1 million in the first quarter of 2020, down 39.2 per cent from a year ago, according to Refinitiv data as at April 2.

The value of announced M&A deals involving Asia-Pacific companies, excluding Japan, had also "started slow", falling 2.5 per cent in Q1 to US$189.6 billion - the lowest first-quarter period since 2014.

The number of announced deals was also down 17.6 per cent, hitting a five-year low, said the financial data analytics provider's report on Friday.

Dealmaking activity mostly targeted the financials sector, which accounted for 20.2 per cent market share worth US$38.3 billion, rising 11.7 per cent from a year ago.

Following behind is the real estate sector, which took 16.5 per cent market share worth US$31.2 billion, along with the industrials sector with 11.1 per cent market share, and the energy and power sector, which was at 10.5 per cent.

Among the top M&A deals in the year to date was CapitaLand Commercial Trust and CapitaLand Mall Trust's proposed S$8.27 billion merger via a cash and stock deal.

On the whole, investment banking activities generated US$5 billion in fees in the Asia-Pacific during the first quarter of 2020, down 8.8 per cent from a year ago.

Debt capital markets underwriting fees accounted for 56 per cent of the overall investment banking fee pool in the Asia-Pacific - they dropped 4.8 per cent to US$2.8 billion.

Asia-Pacific investment-grade bonds hit an all-time high, raising US$358.4 billion. The financials sector accounted for 37.2 per cent of the region's bond proceeds, driven by Postal Saving Bank of China's perpetual bond issuance worth US$11.4 billion.

Equity capital markets fees accounted for 23 per cent of the overall banking fee pool. This category rose 22.9 per cent to US$1.1 billion, the strongest first-quarter period since 2018.

Initial public offerings (IPOs) in the region saw their strongest start in almost a decade, raising US$15.9 billion in proceeds - 93 per cent higher from a year earlier. The number of IPOs grew 16.8 per cent from a year ago, driven by Chinese listings.

Syndicated loan fees were down 30.6 per cent to US$560.8 million and took up 11 per cent of the overall banking fee pool.

Meanwhile, completed M&A advisory fees represented 10 per cent of the Asia-Pacific's investment banking fees.

China Citic Bank International topped the charts for overall investment banking fees in the region, excluding Japan, taking up 5.3 per cent of the wallet share in the first quarter.

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