hefty north asia deal pipeline

http://today.reuters.com/business/newsarticle.aspx?type=reutersEdge&storyID=2006-03-31T075822Z_01_SYD277823_RTRUKOC_0_US-FINANCIAL-AUSTRALIA-MACQUARIE-INTERVIEW-U.xml

Macquarie sees hefty North Asia deal pipeline
Fri Mar 31, 2006 2:58 AM ET

By Daniel Morrissey

SYDNEY (Reuters) - Macquarie Bank Ltd. (MBL.AX: Quote, Profile, Research), Australia's largest investment bank, said on Friday it expected to manage a large number of equity offerings in North Asia over the next six months as it grows its business in China and Japan.

The bank, which is ranked a top 10 manager of share sales in Asia ex-Japan, said it was about to run its first initial public offerings (IPOs) in China and would expand its fast-growing equity capital markets business into Japan.

"In the next six months we expect our first batch of bookrunner roles in China IPOs, which have very long lead times, to come to the market and we will also apply for a license to do equity capital markets in Japan," Andrew Low, Macquarie's Asia Head of Corporate Finance, told Reuters.

Macquarie, which has almost as many staff in Asia as it has in Europe and North America combined, is seeking both advisory work in the region and to market its growing stable of Macquarie-branded investment funds.

The funds, which cover the infrastructure, property, telecommunications and media sectors, are a lucrative source of fees for the Australian bank.

Analysts say Macquarie, which boosted its regional reach by buying an Asian equity business from Dutch financial services group ING Groep (ING.AS: Quote, Profile, Research), has an advantage over bigger rivals in operating such funds because it has a decade of experience.

The funds have helped drive rapid growth in the bank, taking its assets under management worldwide to about A$112 billion ($80 billion). Macquarie is expected to at least match its record 2005 profit of A$823 million in fiscal 2006.

The bank's aggressive strategy was highlighted this year by an audacious, if unsuccessful, bid for the London Stock Exchange Ltd. (LSE.L: Quote, Profile, Research), and Chief Executive Allan Moss was named this week by business magazine Barron's as one of the world's top 30 corporate leaders.

ASIA MARKET SPREAD

Low said his bank's Asian capital markets business had grown rapidly, completing more than 35 equity transactions during the past 14 months, including managing 17 of them.

Last year Macquarie helped run the Philippines' largest ever IPO for SM Investments Corp. (SM.PS: Quote, Profile, Research), the holding firm for tycoon Henry Sy's interests in malls, property, banking and tourism.

Other IPOs included Macquarie-branded investment funds in Singapore and South Korea, and it has advised on capital raisings for Indian firms such as Hotel Leela Venture Ltd. (HTLE.BO: Quote, Profile, Research) and Uttam Galva Steels Ltd. (UTTM.BO: Quote, Profile, Research).

"We expect to continue to pick up a reasonable number of equity and hybrid issues in India while the market remains hot, but we are also starting to diversify the revenue streams in this market with more advisory and other income," Low said.

The Macquarie Korea Infrastructure Fund (088980.KS: Quote, Profile, Research), which debuted in Seoul this month, should lead to other equity capital markets business in South Korea, he said.

A key driver of Asian growth for the bank was the 2004 purchase of the ING business, which it rebranded as Macquarie Securities Asia.

"Macquarie's deal pipeline has grown every month since we acquired the ING business and we expect particularly strong deal flow from North Asia in the next six months," Low said.