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

Singapore

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

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

The number of announced deals declined17.6 per cent, hitting a five-year low, according to a report from the financial data analytics provider released on Friday.

Dealmaking activity mostly targeted the financials sector, which accounted for 20.2 per cent of the total. Deals in the financial sector increased 11.7 per cent year-on-year to a value of US$38.3 billion.

Following behind was the real estate sector, accounting for 16.5 per cent or US$31.2 billion worth of deals. The industrials sector made up 11.1 per cent of deals, and the energy and power sector 10.5 per cent.

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

Investment banking (IB) activities generated US$5 billion in fees, down 8.8 per cent from a year ago.

Debt capital markets underwriting fees accounted for 56 per cent of the overall IB fee pool - down 4.8 per cent to US$2.8 billion.

Funds raised from the issue of investment-grade bonds hit an all-time high in the region, at US$358.4 billion.

The financials sector accounted for 37.2 per cent of the region's bond proceeds, driven by Postal Savings Bank of China's perpetual bond issuance worth US$11.4 billion.

Equity capital markets fees accounted for 23 per cent of the overall IB 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. Companies raised US$15.9 billion in initial share 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.