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.
September 18, 2005
Wolf to Piglets: Naught to Fear
Citigroup regional CEO Robert Morse wants Thailand to liberalize its financial system further to allow more foreign participation, but says that local banks have nothing to fear from increased competition.
The Bangkok Post reports:
''Financial services companies compete at the level they have to compete,'' Mr Morse said in a recent interview in Bangkok.
''If you look at the past history around the world, the concern that local companies can't compete has proven mostly unfounded.''
''I don't think local firms give away anything to foreign institutions,'' Mr Morse said, as the headquarters of Bangkok Bank, the country's largest, looms in the skyline. ''If there was more competition, I believe that Thai companies would offer a positive surprise.''
This has been mostly the case in Thailand, where DBS, Stanchart, and UOB have failed to make much of an impact, and HSBC saw its bid to purchase the feculent Bangkok Metropolitan Bank rejected during the post-crisis fallout period.
Citibank, however, has been much more successful in positioning its retail brand and high-end corporate services in Thailand, and now employs some 2000 people despite its single-branch status.
September 06, 2005
Thai Deposit Rates to Rise Sharply, Says KTB
Krung Thai President Apisak Tantivorawong expects a stiff increase in deposit rates in 2005-6, as banks try to stem deposit outflows.
More after the jump:
He thinks 1-year deposit rates could reach parity with inflation, according to an interview in today's Bangkok Post:
Moves by the central bank to tighten monetary policy and implement measures to encourage more long-term household savings will continue to put pressure on interest rates.
Mr Apisak said he believed the Bank of Thailand would likely continue to draw liquidity from the market and push money market rates upward through 2006, which in turn would force commercial banks to also increase rates to manage their positions.
He said Krung Thai Bank had attracted over five billion baht in new deposits over the past six months through its new four-year term deposit that pays 3.75% annually.
If Khun Apisak is correct and inflation stays at its current level of 5.6%, this would means a 350bp rise in 1-year rates by end-06. UBS expects inflation for the rest of 2005 in the 4-4.5% range, which would mean more moderate increases, but notes: "Inflationary
pressure, meanwhile, is picking up." [link: p/w required]