For equity capital markets bankers in Asia this year there is one big story: the huge amounts of funding expected to be raised by Chinese banks. After insurer AIA’s expected IPO became a sale to the UK’s Prudential, a deal that will be financed entirely through a rights issue, the IPO of Agricultural Bank of China (ABC) and follow-on deals from its peers are now the year’s big battleground for equity bookrunners. Some deals, such as the ABC IPO, will be share-only; others, such as an expected round of capital raising by Industrial and Commercial Bank of China, might involve a mix of structures including rights issues, convertible shares and hybrid capital.
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| the expected value of September’s ABC IPO |
So which have been the winners and losers so far? The most prestigious deal, most competitors for coveted underwriting slots agree, is the IPO of ABC. It is the last of China’s four largest state-owned banks to be listed, and perhaps the most challenging to sell given that its first objective has traditionally been to support rural development rather than pursue pure profitability.