Taiwan’s capital markets have had an irregular 12 months, with a dearth of deal flow in 2020. But where there have been opportunities, Yuanta Securities found them, squashing the competition in the primary market while maintaining dominance in the brokerage game.
This year, there have been only three equity capital market transactions and all three were convertible bonds, a niche that is mostly covered by international firms. Taiwan’s capital markets business is primarily generated by small and medium-sized companies, but many shied away from raising funds after the outbreak of Covid-19. However, in 2019, Yuanta showed that when markets are working, it leads.
The firm executed 14 deals in the second half of the year, mostly follow-on offerings and rights issues, but also including an IPO and $100 million convertible bond for Bizlink.
In total, it completed $1 billion in fundraising, a 32% market share, according to Dealogic data. The largest trade was a combined $616 million rights issue and follow-on offering for Cathay Financial Holdings, with Yuanta as the sole bookrunner for both.
Taiwan’s market is dominated by local firms. Yuanta’s closest domestic competitors for primary business are SinoPac Securities Corp and Taishin Financial, which captured 9.9% and 9.7% of the market, respectively, during the awards period.
The line-up is similar in the securities trading business where Yuanta consistently handles the largest chunk of trades. The secondary market is saturated with brokers, meaning the portions are smaller, but Yuanta was still able to handle between 11% and 12% of all trades each month for the past year, whereas its rivals had market shares in the single digits.
Under chief executive Bobby Hwang, the firm has maintained its leading position and built a strong reputation. Asiamoney polled readers in 2019 for their opinions on Taiwan and Yuanta won in brokerage, research and sales for the country, while its analysts were rated the highest across all sectors.