Investment banking fees in Asia ex-Japan down 26% to US$5.9 billion in Q1: Refinitiv

INVESTMENT banking fees in the Asia-Pacific region, excluding Japan, fell 26 per cent on the year to US$5.9 billion in the first quarter of 2023 – the lowest start to a year since 2020, according to Refinitiv data released on Tuesday (Apr 4).

Fees generated in the region accounted for 24.4 per cent of total global fees earned in the period, just exceeding Europe, which contributed to 23.7 per cent of total fees.

Deal-making activity in the region also dropped 29.4 per cent to US$162.5 billion in Q1, compared with the same period last year. This made it the lowest first-quarter period since 2014 by value.

The materials sector was responsible for 25.6 per cent of total deal-making activity involving Asia-Pacific, rising 164 per cent to US$41.6 billion from the year-ago period. This was followed by the industrial sector, which accounted for 16.1 per cent of market share at US$26.1 billion.

Refinitiv also noted that 11 special purpose acquisition company combinations were announced in Q1. These totalled US$9 billion, up 44.9 per cent from the previous year.

Private equity-backed deals targeting the Asia-Pacific region continued to slide, dropping 58.6 per cent to US$19.7 billion.

BT in your inbox

Start and end each day with the latest news stories and analyses delivered straight to your inbox.

Sign Up

Sign Up

In the equity capital markets, underwriting fees fell 18 per cent year on year to US$1.6 billion, as equity and equity-related issuances hit a three-year low at US$61.2 billion. This was 14.7 per cent lower than the same period last year, even though the number of issuances rose 6.1 per cent on the year.

The amount raised from initial public offerings (IPOs) fell 47.9 per cent to US$16.2 billion in Q1 2023, although the number of IPOs grew 8.6 per cent compared with Q1 2022. Chinese IPOs were the key driver of activity, raising US$14 billion.

Convertible bonds were down 37.5 per cent to US$7.9 billion, reaching a six-year low, Refinitiv observed. In contrast, follow-on offerings rose 32.2 per cent year on year to US$37.1 billion – the highest first-quarter period since a record start in 2021.

SEE ALSO

Investment banking fees in Asia ex-Japan slide 17% to US$28.6b in 2022: Refinitiv

Debt capital market fees collected dropped 18 per cent year on year to US$3.1 billion. This came as the region’s debt capital markets saw a slowdown in primary bond offerings from Asia-Pacific-domiciled issuers. These issuers raised US$854.5 billion in the first quarter, 14.1 per cent lower compared with the same period last year.

Bond offerings from government and agencies accounted for nearly half, or 45.2 per cent, of market share at US$386.5 billion.

Syndicated lending fees were down 45 per cent at US$714.9 million, while advisory fees in the region from completed merger and acquisition deals slid 49 per cent to US$564 million.

China’s Citic continued to lead overall investment banking fees, generating US$480.6 million. This was 8.1 per cent of the total Asia-Pacific investment banking fee pool.