October 06, 2005
Credit-Raising A Go-Go
Seems like everybody and his brother is out on the road now trying to sell some bank stock.
China Construction Bank is still in "pre-marketing" (how this is distinguished from "marketing" has always eluded me, and I've done both) for an offering which will raise $7.7bn at the top of the pricing range, but the institutional tranche is already reportedly covered. Even allowing for the prevaricatory nature of all in ECM who speak on such issues....not a bad showing. (that's what MS/CSFB/CICC are calling you about)
Mizuho is taking advantage of the run-up in Japanese bank stocks to push out $4.7bn of shares (not new but held by an older liquidation vehicle) so as to repay past government support. (Nikko/Citi/Mizuho, + MS/ML will be ringing your doorbell on this one)
Lone Star's Tokyo Star Bank (formerly Tokyo Sowa) is also on the road with Japanese investors, looking to raise up to $798m in its IPO. (a Citi/Nikko/CSFB joint, with bookbuilding 10/4-10/14 and pricing 10/17)
ECM Tid-bits: ICICI Bank's Board meets next week to discuss raising additional capital. State-owned competitor Union Bank has already applied to the government for permission to sell 45m new shares. Standard Chartered Bank (Thai) also plans to bolster equity, but with new capital coming exclusively from the parent, you're out of luck if you want any.
October 03, 2005
First Day of MUFJ Trading
The merged Mitsubishi-Tokyo Financial Group and UFJ Holdings agglomeration is in effect today, with the new MUFJ (ugly abbreviation) trading on TSE (8306.JP) this morning. The world's largest bank sold off on its first day, closing down 4.7%.
September 10, 2005
Falling Knife Finally Caught
After at least 7 years of year-on-year contraction, Japanese bank lending has finally ticked up a less-than-robust 0.2% in August, in a possible precursor to what the WSJ calls "a cycle of expansion." Although the turn for the Japanese banking sector has been called perhaps a dozen times in as many years with no success, this looks like a solid economic breakout.
The Journal noted:
...[B]anks are much healthier as they have been cleaning up their bad-loan problem. If banks start to play the essential role as the provider of credit, economists say, Japan's economy could enter a positive growth cycle. In such an environment, corporations take out loans to invest in production and sales facilities and households borrow money to build homes or purchase big-ticket items such as cars. Already, capital spending by Japanese companies is projected to expand by 10% or so in the current year ending March 31, which could eventually encourage them to borrow more from banks.
Analyst response is positive but not as effusive as the press:
* Kobayashi-san at Deutsche notes that the moving factor behind the good numbers was expansion at the Tier-1 regional banks, with both the larger city banks and smaller Tier-2 regionals still down YoY.
* CLSA has no specific loan growth comment that we saw (probably busy with the conference), but is generally bullish on regionals, having initiated Musashino Bank (8336.JP) on Friday with a Buy.
* UBS sees as a "surprise" but notes "underlying loan demand has stabilised."
* That's where we got bored and left off.
September 05, 2005
UFJ kicks it SEC-style
UFJ Holdings reports its US GAAP earnings for FY03/05 this AM in New York, for all you accounting wonks who like to compare to IAS and JAS.
Nikkei Re-jig adds Sinsei, MTB
The annual Nikkei index rejiggering is upon us; no signs of any massively unexpected shifts leading to windfall profits for bank investors - more's the pity. Nevertheless, we press on: