UBS may lose Asia ECM crown for first time in 6 years

By Denny Thomas and Michael Flaherty

HONG KONG (BestGrowthStock) – Goldman Sachs (GS.N: ) is on track to dislodge UBS (UBSN.VX: ) as Asia’s top equity capital market house for the first time in six years in 2010, helped by its role in several major Greater China offerings.

There are still a few offerings in the pipeline that could change the final status of the league table rankings.

But as the Asia banking industry (Read more about the banking industry recovery.) enters the final weeks of the fourth quarter, the annual list of top underwriters appears to be headed for a shake up.

League table rankings are more about bragging rights than anything. Yet with equity underwriting the major source of investment banking revenue in Asia, the region’s tables do translate to the bottomline, particularly amid a wave of corporate fund-raising.

“Every banker I meet is telling me about deals they’re working on. And the pie is getting larger,” said Andy Mantel, founder and CEO of Pacific Sun Investment Management. “A few years ago, a lot of the banks lost money and people. Now, deals are getting done. Markets are efficient once again.”

With AIA’s $17.9 billion IPO priced, year-to-date Asia equity and equity-linked league tables, excluding Japan, show Goldman Sachs on top with involvement in 55 issues worth $17.3 billion, according to Thomson Reuters.

Goldman, which last topped the Asian ECM league tables in 2004, was fourth last year.

The Wall Street bank was helped by the role it played in its own placement of shares when it sold down a stake in Industrial and Commercial Bank of China (1398.HK: ) (601398.SS: ) — but as far as league table credit is concerned, all is fair.

That UBS would still be No. 2 in the rankings is a testament to the strength of its equity franchise. The bank was left out of major roles in most of China’s major capital raisings this year, for reasons sources describe as more political than practical.

It also saw two of its top Asia equity capital markets bankers leave this year.

So having missed out on AgBank’s $22.1 billion IPO and Bank of China’s (3988.HK: ) $8.8 billion share placement, UBS still managed to be part of equity deals that hauled in $16.49 billion, around $846 million less than Goldman.

Matthew Koder, the head of global capital markets at UBS and the man credited as the architect of the bank’s Asia ECM franchise, remains a managing director at the bank.

UBS has been involved in 73 equity issues so far this year, the most of any bank, Thomson Reuters data show.

Morgan Stanley (MS.N: ) (Read more about the money market today. ), which also acted as joint lead manager on the AIA and AgBank offers, is currently at No. 3 in the ECM, ex-Japan rankings.

Asian IPOs have raised a record $124.7 billion so far this year, accounting for more than 66 percent of all global volume, reflecting the region’s resilient economic growth and hot stock markets.

CITI TAPPING ASEAN DEMAND

While Hong Kong and Shanghai often get the bulk of the attention during an Asian IPO burst, a recent batch of record offerings sailed through Southeast Asian exchanges, in addition to a major deal in Mumbai.

Citigroup has led the way in gaining bookrunner spots for the spate of record IPOs stemming from those cities, taking part in four of the deals which generated proceeds of $10.6 billion: Malaysia’s Petronas, Singapore’s Global Logistic Properties (GLPL.SI: ) and Cebu Air (CEB.PS: ) of the Philippines.

Citi is also involved in the $3.3 billion Coal India IPO that will list in Mumbai.

Estimated fees from IPO underwriting in Asia, excluding Japan, are set to exceed $2.6 billion this year, the highest since 2000, Thomson Reuters/Freeman data showed.

“The quality of IPOs at the moment is quite high, which is another sign that it has got a lot further to go,” said Sydney-based Shane Oliver, head of investment strategy at AMP Capital Investors, which oversees $100 billion.

“It’s when the quality starts to deteriorate, you think it’s getting toppy.”

(Editing by Muralikumar Anantharaman)

UBS may lose Asia ECM crown for first time in 6 years