Thursday 4 June 2009

UBS sees Asia markets rallying in second half

“I certainly believe a turnaround will take place in the second half, as investors are increasing their risk appetite, encouraging them to put more money in the equity market,” said David Chin, a co-head of investment banking at UBS Asia.

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Guanyu said...

UBS sees Asia markets rallying in second half

Wong Ka-chun
3 June 2009

Asia’s capital markets are expected to rebound strongly in the second half of this year, providing an increasing supply of quality initial public share offerings, according to a banker.

“I certainly believe a turnaround will take place in the second half, as investors are increasing their risk appetite, encouraging them to put more money in the equity market,” said David Chin, a co-head of investment banking at UBS Asia.

“The worst has passed, and I think the Hong Kong and [mainland] equity markets will lead the regional recovery.

“More quality and sizeable [initial offerings] are coming in the next few months, and investors, especially long-only funds, were keen buyers in the last few [share sales].”

Investment banks across the region have seen a sharp decline in revenue so far this year to US$1 billion, according to Dealogic.

Banks received US$3.2 billion last year, down 44 per cent from a record high of US$5.7 billion in 2007.

Although Asian equity markets suffered badly after the outbreak of the global financial crisis in September last year, they have rebounded recently on the back of strong capital inflows and various government stimulus measures.

The Hang Seng Index has rallied 27.81 per cent since the beginning of the year.

Bankers said the pipeline for offerings was crowded but had to offer attractive valuations.

Mainland infrastructure or domestic consumption offerings were poised to benefit from rising infrastructure capital investment and steady gross domestic product growth that would continue to drive flotations, said Mr. Chin.

Meanwhile, he expected the mainland equity market to eventually reopen to listing candidates on the two domestic bourses as early as August, while foreign firms might be allowed to sell their shares on the mainland late next year.