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主题: 中国公司海外上市系列:Investment banks on mainland offensive (转贴)
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作者 中国公司海外上市系列:Investment banks on mainland offensive (转贴)   
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文章标题: 中国公司海外上市系列:Investment banks on mainland offensive (转贴) (1089 reads)      时间: 2004-4-30 周五, 03:47   

作者:安普若海归商务 发贴, 来自【海归网】 http://www.haiguinet.com

Investment banks on mainland offensive

China IPOs are expected to more than triple this year, and foreign arrangers hope to grab a share of the business

BLOOMBERG


Credit Suisse Group co-chief executive John Mack flew to Beijing from New York for 24 hours in January last year to persuade China Life Insurance executives to hire the bank to arrange a US$3.4 billion initial share sale.
Mr Mack succeeded with the help of Paul Calello, Credit Suisse First Boston's Asia chairman, who accompanied him on the pitch. CSFB, the Swiss lender's investment-banking unit, earned an estimated US$30 million in fees co-arranging China Life's public offering, the world's biggest last year.

Mr Calello says the bank's investment is paying off in a country that has enticed and frustrated overseas bankers for more than a decade.

"Last year, CSFB made money in China," Mr Calello said in an interview. "For the first time it made a meaningful contribution to our bottom line."

Overseas investment banks in China have faced years of no profit, clashes with the government and, more recently, falling investor demand for shares in Chinese companies. They are betting they can overcome those obstacles as China opens securities trading and other businesses to overseas banks and sells shares in its biggest lenders, insurers and phone companies.

At Morgan Stanley, the world's No 2 securities firm, revenue from China-related businesses has risen 12-fold in the past decade, said Mike Berchtold, the firm's Hong Kong-based head of investment banking for Asia outside Japan.

Fees from China share sales last year, including China Life's, totalled about US$200 million. As Chinese firms plan a record $18 billion in overseas IPOs this year, fees are set to more than triple to $630 million, based on the average 3.5 per cent share of a sale's value that investment banks earn in China, according to data compiled by Bloomberg. CSFB ranked second among arrangers of overseas share sales by mainland companies last year after Morgan Stanley's Chinese investment-banking venture, China International Capital Corp, Bloomberg data show.

"All the big investment banks have increased their focus on China," said David Chapman, a fund manager at Towry Law Asia HK. "It will be one of their most important clients for the next 20 years and beyond."

Scheduled for this year are IPOs by China Construction Bank, the nation's No 3 lender, China Netcom Corp, a unit of China's second-biggest fixed-line phone company, and China Minsheng Banking Corp, the mainland's only privately owned lender.

Overseas IPOs and share placements by Chinese firms have totalled US$6.4 billion so far this year.

Shares of Weichai Power, which raised $171 million in an initial offering on March 11, have risen 12 per cent. Three other IPOs by Chinese companies in recent months have not performed as well.

Semiconductor Manufacturing International Corp, a Shanghai-based chipmaker, has declined 19 per cent since its March 18 debut. United States shares of Linktone, a Shanghai-based company offering messaging and games to mobile-phone users, are 28 per cent below their high on March 4, the day the firm sold shares.

Shares of Tom Online, a Beijing-based seller of wireless-messaging services, have fallen 16 per cent since they began trading on March 11.

Companies planning bigger share sales later this year, including state-owned Construction Bank, may also miss targets, said Glenn Henricksen, a founder of Hong Kong-based CIF Consultants, which advises companies on investment risks in China.

"The amount the companies want to raise may be far above the amount they actually get if the euphoria that surrounds the China growth story tapers off," said Mr Henricksen.

That is not deterring banks. Mr Mack and his co-chief executive at Credit Suisse, Oswald Gruebel, plan to gather their top 11 executives in Shanghai later this year - the first time in the bank's 148-year history the monthly executive board meeting will be held in Asia.

"We are having this meeting in Shanghai because we want our executive board to understand the increasing importance of China to our clients and our employees," Mr Mack said through a New York-based CSFB spokeswoman, Jeanmarie McFadden.

Overseas banks are not new to China. HSBC Holdings, based in Britain, was founded in 1865 in Hong Kong and Shanghai to help finance trade between China and the west, while Citigroup, the world's biggest financial-services company, opened its first China branch in 1902.

Last year, Citigroup was the No 3 underwriter of overseas share sales by Chinese companies, according to Bloomberg data.

Morgan Stanley bought a 33 per cent stake in China International Capital, a local investment bank, in 1995. Credit Suisse Group opened its first China office in Beijing in 1985.

Some overseas banks have clashed with Chinese government officials.

In September 2001, Zhou Xiaochuan, the country's top securities regulator at the time, told reporters CSFB had engaged in "political misconduct" after the bank took Taiwan's finance minister and stock exchange president on an investment tour of Europe.

China later fired the bank from arranging a US$2 billion share sale by China Unicom, the nation's second-biggest mobile-phone company.

China's government did not hire Morgan Stanley for Shandong International Power Development's three billion yuan share sale in 1997 after the bank issued a report advising clients to withdraw from Hong Kong's stock market following the city's return to Chinese rule.

Philip Wong Yu-hong, a member of the Legislative Council, accused Morgan Stanley in October 1997, when the report was released, of "manipulating" the market.

"Political, cultural and commercial sensitivities need to be carefully thought through when working in the China market," said Gavin Geminder, KPMG's Hong Kong-based head of corporate finance for China and Hong Kong. "There are always potential pitfalls when pushing into any emerging market like China."

Such risks have not stopped the world's biggest investment banks from pouring resources into China, where rising incomes have helped the average value of shares traded daily in Shanghai this year to more than double from three years ago to US$2.2 billion.

The world's sixth-largest economy expanded 9.1 per cent last year, three times faster than the heralded Group of Seven industrialised economies.

This year, the value of planned China IPOs is set to more than triple from US$5.7 billion last year, according to companies and investment bankers involved in scheduled deals. Demand for such assets is growing. The Hang Seng China Enterprises Index has more then doubled in value in the past year.

Investment-banking opportunities are spreading beyond China's biggest cities.

Mr Calello said he received a message during a January vacation in the mountains of China's southwestern Yunnan province, 3,000 kilometres from Beijing, from one of his bankers asking him to visit a company in the province in the hope he could help it sell shares.

"Wherever you go in China, there's someone to meet," he said, declining to name the prospective client.

Yunnan, where per-capita income averaged US$626 in 2002, has dozens of state companies making goods from copper and tools to Chinese medicine. Only one, machine-tool maker Jiaoda Kunji High-Tech, has sold shares overseas. The company's shares debuted in Hong Kong in 1993 and have risen 29 per cent in the past year.

China is opening new businesses to overseas investment banks. The China Securities Regulatory Commission allowed overseas buyers in the US$571 billion market for trading in yuan-denominated shares in June last year, and has approved 12 foreign financial institutions - including CSFB, Morgan Stanley and Goldman Sachs Group - to invest so far.

In December last year, overseas banks won permission to own 20 per cent of local banks, up from 15 per cent. They received approval to provide local-currency services including loans and deposits to Chinese companies in February this year.

CSFB applied last month to trade derivatives - contracts whose value is tied to the value of another asset or an index - for the first time and increase the amount of yuan-denominated shares it can own to more than US$600 million from $50 million, Mr Calello said.

The bank plans to add a representative office in Shanghai, home to its only China branch, and is hiring "a significant number" of Shanghai and Hong Kong-based analysts to advise clients on investing in China, he said.

"We continue to invest significantly in this market," Mr Calello said. "We have seen it harvesting gains faster than we expected."

Deutsche Bank, Europe's No 2 bank by assets, enlisted German Chancellor Gerhard Schroeder in January to ask China's government to consider hiring the bank to underwrite China Construction Bank's share sale, people familiar with the plan said at the time.

The Frankfurt-based bank plans to form an investment-banking venture in China that would allow it to arrange domestic share and bond sales, trade local securities and manage funds for local clients, spokesman Michael West said.

Deutsche Bank is in talks to buy Shenzhen-based Hantang Securities, bankers involved in the talks said in October. Deutsche tied with Citigroup as the No 3 underwriter of share sales in China last year after both banks participated in China Life's initial offering, according to Bloomberg data.

Morgan Stanley has doubled its number of Mandarin-speaking investment bankers based in China to 40 over the past five years, Mr Berchtold said.

"We are constantly on our toes trying to stay ahead of China's growth in business," he said. "We continue to increase our focus on China."

Goldman Sachs is in talks to start an investment-banking venture with local banker Fang Fenglei and Legend Holdings, China's biggest computer maker, people familiar with the situation said on March 19. Goldman did not arrange any share sales for Chinese companies last year.

Investment banks in China "have been doing this for a decade and finally they're making some kind of real money," Mr Henricksen said. "If they start reporting significant profits for two or three years running, then I would say the business has turned a corner."




作者:安普若海归商务 发贴, 来自【海归网】 http://www.haiguinet.com









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