North Asia – Page 5

In-depth: Exploring Hong Kong and Indonesiaâs strategic potential | FinanceAsia

On: August 1, 2023

Last week (July 26), Hong Kong Exchanges and Clearing Limited (HKEX) and the Indonesia Stock Exchange (IDX) signed a Memorandum of Understanding (MoU) marking strategic collaboration aimed at strengthening ties and exploring mutually beneficial opportunities across both markets.

According to the announcements, the partnership will see the exchanges meet regularly to develop new capital market products, including exchange-traded funds (ETFs) and derivatives; enable cross-border listings; and promote sustainable finance across the region, through shared best practices and the development of carbon markets.

The releases point to the benefits made available through enhanced cooperation, including access to the international connectivity and vibrance on offer via Hong Kong’s marketplace, as well as the talent, creativity and innovative characteristics of Indonesia’s “new economy” participants.

Discussing the news, Singapore-based Clifford Chance partner, Gareth Deiner, who specialises within the firm’s South and Southeast Asian capital markets practice, shared with FinanceAsia his take on the opportunity presented by forging a deeper connection with the market that is home to world’s largest nickel supply.

“The mutually beneficial aspect of this collaboration is that it offers access to a wide pool of North Asian institutional investors and therewith, an enhanced liquidity pool.”

Shanghai and Singapore-based Clifford Chance partner, Jean Thio, acknowledged the significant number of Indonesian conglomerates that operate outside of the domestic market and seek access to North Asia’s investor community.

She highlighted her work in 2022, advising on the spin-off IPO of Chinese dairy farm operator AustAsia Group, a subsidiary of Indonesian agribusiness, Japfa, as demonstrating this point.

“International issuers look to Hong Kong as a way of accessing international institutional capital. The new collaboration complements other regional initiatives, such as Stock Connect.”

Hong Kong and China’s central banking authorities announced in May the launch of the sixth iteration of the regional bilateral scheme, the northbound channel of Swap Connect. The initiative is the first derivatives mutual market access programme globally and opens up institutional entry to China and Hong Kong’s interbank interest rate swap markets.

In terms of the current trends permeating Indonesia’s capital markets, Deiner shared, “Historically, Indonesia’s future-facing minerals – cobalt, copper and nickel – would be exported. But now these are proving key elements of Indonesia’s onshore energy transition story, as they are core components used in the manufacture of wind turbines, solar panels and electric vehicles (EVs).”

“As such, Indonesia has implemented bans on the export of unprocessed nickel ore, in order to facilitate the development of the EV supply chain onshore.”

Deiner and his team advised the underwriters of Harita Nickel’s IDR9.7 trillion IPO on the IDX in April, which media attributed to being part of a government push to privatise state-owned enterprises (SOEs).

Amit Singh, Singapore-based partner and head of Linklaters’ South and Southeast Asia capital markets practice agreed that the newly formed “super-connection” opens the door to meaningful, increased liquidity for Indonesian companies.

“Hong Kong also gains a valuable link with the growing mining and supply chain powerhouse that Indonesia is developing into,” he told FA.

“Mining, minerals and other supply chain-focussed industries are driving Indonesia’s IPO boom in 2023,” Singh explained, pointing to his involvement in Merdeka Battery’s IDR9.2 trillion ($620 million) IPO in April. The PT Merdeka Copper Gold Tbk subsidiary owns one of the largest nickel reserves globally and has a portfolio of EV battery assets across the Sulawesi region.

“This trend is likely to continue and grow in the upcoming years, and Hong Kong is clearly seeking to position itself closely with Indonesia and its burgeoning strengths in these areas.”

Dual listings

Tjahjadi Bunjamin, Jakarta-based managing partner and head of the finance practice at Herbert Smith Freehills (HSF) partner firm, Hiswara Bunjamin & Tandjung (HBT), agreed that the MoU means that Indonesia will obtain greater access to Chinese issuers and the related international investment base.

“This is particularly important given the dominant role of Chinese companies in the EV ecosystem.”

He explained to FA that the collaboration further enables the exploration of dual listings by both parties: “Both will benefit from a more coordinated approach to listing in the two jurisdictions, as well as more clarity on listing requirements for issuers and investors.”

“Dual listings and increased regulatory cooperation will accelerate the maturation of the Indonesian capital markets, allowing them to more quickly adapt as deal sizes and investor interest and scrutiny in the market widens,” Singh added.

David Dawborn, HSF partner and senior international counsel at HBT, noted that a challenge for the partnership will involve the fact that Indonesia’s capital markets system remains primarily focussed on basic equity and debt securities.

“It could benefit from new ideas and products available through Hong Kong’s capital markets system, which is more flexible and easier to navigate in many aspects.”

In prior discussions with FA, experts have commended Indonesian regulators for their efforts to make the market’s domestic exchange more accessible and attractive as a listing destination.

In late 2021, the Indonesian financial services authority, Otoritas Jasa Keuangan (OJK), approved amendments to the listing regime to allow firms with multiple voting rites (MVR) to participate on the domestic exchange. The move signalled continued progress to bring Indonesia’s capital markets in line with other global exchanges, such as those of the US and Hong Kong, which have had dual class share frameworks in place since the 1980s.

Recent research by the Hong Kong Trade Development Council (HKTDC) citing Refinitiv data suggests that more than 70% and 25% of companies currently listed on IDX meet the minimum capital requirement for listing on Hong Kong’s GEM (which serves small and mid-sized issuers) and main board, respectively. “This implies that there is a huge potential pool of candidates for dual primary and secondary listing,” the report noted.

However, the research added that so far, “only three Indonesian companies domiciled in Indonesia are currently listed overseas, and none are listed in Hong Kong.”

Tech story

Poised to become the seventh largest global economy by 2030, Dawborn underlined Indonesia’s endeavours to become a regional leader for Southeast Asian capital markets, following its success as host of last year’s G20 summit, in Bali.

Already home to a variety of tech unicorns (companies valued at over $1 billion) including Blibli, Bukalapak, Traveloka and GoTo, Indonesia is fast-emerging as a Southeast Asian tech hub, with its internet economy expected to double in value to be worth $146 billion by 2025.

Experts suggest that Indonesia holds significant potential to elevate Asia’s prominence on the global tech stage.

“Where we are in the macroeconomic cycle, with interest rates at an all-time high following another bump by the Fed last week, the landscape is challenging – high interest rates are not the friend of the tech sector. But the minute that inflation starts to settle, I think we’re going to witness the next chapter of Indonesia’s tech story,” Deiner said.

“Traditionally, Southeast Asian companies have always thought of the US when it comes to tech, but the HKEX has worked to be increasingly accommodative for these firms and Hong Kong is starting to prove a very attractive listing venue for those active in biotech,” explained Clifford Chance’s Thio.

“So-called US stock orphan listings (where a company has no operations, investor relations or management in a particular market but chooses to list there) are becoming a real discussion point across the Asian IPO landscape. I agree that Hong Kong may become an increasingly compelling venue for tech firms. In doing so, it supports the regional sector growth story,” Deiner added.

The tech sector is also set to support Indonesia’s efforts in the sustainability space. The market published the first version of its green taxonomy in January 2022.

“The ESG frameworks and disclosure standards of listing venues have become a hot topic in the IPO execution process and in equity offering documents more generally, and the variation in ESG disclosure standards across different international markets is creating a degree of execution friction across transactions in different markets,” Deiner explained.

“I was interested to read that the exchanges highlighted ESG considerations in the MoU as this will hopefully present an opportunity for the two markets to converge on ESG standards.”

“If this leads to a greater uniformity in ESG disclosures across primary equity markets, this could really be a game changer for market activity, and would be a very exciting development to monitor,” he added.

“As Hong Kong already has more developed carbon related, ETF and derivative products and trading systems, Indonesia and the market’s investors will benefit from access to this knowhow and technology,” noted HBT’s Bunjamin.

Jakarta-based corporate partner and capital markets lead, Viska Kharisma, told FA that following the introduction of Indonesia’s Financial Services Omnibus Law in 2023, OJK has been considering marketing more types of offshore securities in Indonesia, including carbon-related instruments.

“We understand that OJK and IDX propose to issue a new carbon market trading regulation in the near future, which should facilitate access by international investors to carbon credit opportunities through Indonesian industrial and mineral companies,” she said.

Reflecting on the opportunity on offer as a result of the official partnership, Deiner shared, “Where there is a cross- or secondary listing as part of a primary offering on any two international exchanges, you’re going to have an element of friction between their respective listing standards and the requirements that one legal jurisdiction or one regulator will impose versus another – and in many ways, the art of dealmaking in large-scale equity capital market (ECM) transactions of this nature, involves getting these two pieces to fit.”

“There’s nothing particularly apparent that has created a roadblock between the markets until now, but then that’s why you have the MoU. Hopefully it will provide a robust basis to ensure that any future obstacles can be navigated or removed,” he concluded.

HKEX declined to comment beyond the press release. IDX, the Indonesian Chamber of Commerce and Industry (KADIN) and a number of Indonesian banks did not respond to requests for comment.

Sustainable Leaders series: Ayalaâs path to an ESG driven business | FinanceAsia

By: Marcus Ching

On: July 24, 2023

In: Asia, Finance, South-East Asia

With several ESG-backed initiatives in recent years, the Philippines-based conglomerate Ayala has solidified its commitment to sustainability. Operating across verticals including energy, finance, infrastructure, and real estate, Ayala has committed to net zero greenhouse emissions by 2050. The conglomerate’s energy wing ACEN recently created the world’s first energy transition mechanism (ETM) in November 2022, backed by BPI and RCBC.

On the social front, Ayala’s GCash app and BPI’s BanKo have played pivotal roles in financial inclusion for unbanked Filipinos and small to medium size enterprises. BPI and Globe are currently reviewing their framework to consciously focus on these areas.

When it comes to governance, Ayala’s boards are working towards an appropriate level of diversity and independence. This involves maintaining high standards when it comes to transparency and disclosure.

The 190-year-old company’s social and sustainability initiatives have a long history. Albert de Larrazabal, CFO at Ayala Corporation said, “We have always aligned ourselves to national interest and had very high standards of governance and stewardship. As we must be mindful of the ecosystems we operate under, ESG in various forms has always been part of our value proposition.”

Ayala’s approach to ESG

Today, ESG-based financing is a priority for Ayala. Apart from ACEN’s implementation of the world’s first ETM, Ayala has issued a social bond with the IFC in support of its cancer hospital. Larrazabal said, “We are looking to do KPI-linked social and ESG financing, which incorporates targets into the commercial terms and conditions of the loan.”

Even during the M&A process, the conglomerate is mindful of integrating new acquisitions into its ESG framework. Ayala has also taken steps to ensure that ESG is a priority that is ingrained at the highest levels of the organisation, leveraging its membership with the World Business Council for Sustainable Development (WBCSD). The conglomerate’s board has received training which ensures they can play an active role in tracking and monitoring developments in the ESG space.

Corporates making public commitments to sustainability draw a lot of attention, not all of it positive. Asked how Ayala approaches concerns about greenwashing, Larrazabal said, “Sometimes it happens inadvertently because of incorrect measurements. That’s why we brought in South Pole. We have taken steps to ensure we are on the right track by committing to independent verification, to give people a degree of reassurance.”

Building a model for the APAC region

While the need for sustainable leaders is strongly felt across APAC, many countries in the region have a minimal contribution to emissions — the Philippines emits half the global average on a per capita basis. Larrazabal said, “Between 80% to 88% of our emissions — depending on individual businesses — are scope 3.” These emissions are defined as the result of activities from assets not owned or controlled by a reporting organisation, but which are a part of its value chain. Larrazabal said, “Our scope 3 is somebody else’s scope 1 and scope 2. We need an environment that enables, incentivises, and if that fails, penalises those who disregard scope 1 and 2.”

Many emerging markets grapple with issues similar to those facing the Philippines — adopting renewable energy, while meeting the demands of a growing population and economy. As a result, ETM-like arrangements may be embraced to a greater extent. Asked for his advice on managing such a transaction, Eric Francia, president and CEO at ACEN said, “It is important for investors to reconsider their position on coal, so long as the principles are well understood. One may be investing in a coal plant, but for a good purpose, which is enabling its early retirement.”

Offering a financial perspective on the ETM, TG Limcaoco, president and CEO Bank of Philippine Islands added, “We provided lending and brought in other institutions. We took reduced rates of returns for equity and debt exposure, which allowed us to shorten the life of the plant by 10 to 15 years. It is a big win for everyone involved.”

For more on Ayala’s adoption of ESG and a deeper insight into the world’s first ever ETM, please watch the accompanying video.

Asia’s ESG investors must ‘re-imagine role of capitalâ | FinanceAsia

By: Marcus Ching

On: July 18, 2023

In: Asia, Finance, South-East Asia

A version of this story was first published by sister title, AsianInvestor.

Infrastructure investors in Asia can promote a new, more ambitious role for capital in funding social and environmental development, according to Nikhil Chulani, investment director covering the industries, technology and services sectors at British International Investment.

“On the markets that we at BII focus on in Africa and South Asia, there are huge opportunities for growth and achieving greater scale,” he told an audience at the Sovereign Wealth Fund Institute conference in London in June.

“To accelerate progress in realising the potential of these opportunities, one key aspect is vision and ambition, and tapping into creative solutions via financial services sector to re-imagine the role of capital.”

The UK development finance institution currently invests between $1.5 and $2 billion per year in Asia, Africa and the Caribbean.

He noted that, as ESG investing broadens from a focus on people to include the environment, the scope of allocations, and the range of problems they address, is widening. He said developing bottom-up strategies is more important than ever.

Being able to clearly identify and articulate which problems investors are aiming to address with their allocation is crucial, he added, emphasising the need to integrate impact and financial return within an investment model.

“Having an impact doesn’t exist separately from investing, it is a core part of investing,” Chulani said, adding that, while many investors still saw the ESG potential of their investment as distinct from its investment potential, attitudes were changing.

Size matters

Michael Anderson, who was director general between 2010 and 2013 of the UK’s Department for International Development, a government department that was responsible for more than $6 billion in annual aid programmes, said that a pressing question for enterprises and projects with a social or environmental dimension was achieving the scale necessary to unlock large investments.

“It’s not that we need to do more to attract major investors, but when they are attracted they need to have the deal flow to enable large ticket sizes,” he said.

“Big investors with multibillion dollar funds can’t go after small deals,” he added. “The key challenge is thinking at a bigger scale, especially in areas beyond infrastructure.”

“There has been some good investment in green infrastructure, but not enough in other areas,” he noted, pointing to social services, social infrastructure, and businesses designed to have a positive social impact.

Anderson, who is founder and CEO of MedAccess, a social enterprise improving access to medical innovations wholly owned by the British International Investment, gave the example of essential medicines.

“The critical reason that these drugs are not getting into markets where they are needed is that the companies who manufacture them don’t find it commercially viable to sell into those markets,” he said.

Investors were essential in providing the “catalytic finance” to de-risk distribution into less profitable markets, he added.

Anderson gave the example of a recent TB drug project mediated by MedAccess, where the finance provided reduced the per dose cost from $40 to $15. MedAccess also facilitated increased production by the drug company and worked with companies to secure distribution.

“Sometimes this means lower margins [for manufacturers],” he noted.

Local opportunities

However, Ana Nacvalovaite, research fellow at the Centre for Mutual and Co-owned Business to Kellogg College, University of Oxford, speaking at the same session, said small-scale, local projects offered considerable opportunities for ESG investors, given their strong social and environmental credentials in many cases.

Such projects that are aimed at securing specific social or environmental outcomes often involve joint investment by development banks alongside sovereign and other institutional investors such as pension funds.

But those institutions best placed to provide such “blended finance” are not necessarily the biggest, Nacvalovaite observed, pointing to the example of funding for rural farm co-operatives in Rwanda.

“The [Government Pension Fund of Norway] has its hands tied, since approval is required by the ministry of finance. But Rwanda’s fund [the Agaciro Development Fund, launched in 2012] could trial this. It is the right size and Rwanda has lots of co-operatives, so they are looking at these blended finance opportunities,” she said.

Nacvalovaite said that while single project investments with a finite lifecycle might produce tangible environmental or social benefits during their lifetime, they also created challenges when they complete.

“The community that has been built up around it has to pack up and move on,” she said.

By contrast, financing co-operatives and employee-owned businesses provided longer lasting social outcomes. “We are talking about people creating their own infrastructures,” she said.

Ayalaâs path to an ESG driven business | FinanceAsia

By: Marcus Ching

On: July 18, 2023

In: Asia, Finance, South-East Asia

Ayala’s approach to ESG

Building a model for the APAC region

For more on Ayala’s adoption of ESG and a deeper insight into the world’s first ever ETM, please watch the accompanying video.

SUSTAINABLE FINANCE POLL 2023: Asian debt markets sharpen ESG focus | FinanceAsia

By: Marcus Ching

On: July 11, 2023

In: Asia, Finance, South-East Asia

It’s looking increasingly like the time for sustainable finance to shine. After a fall in the year-on-year volume of green, social and sustainability (GSS) instruments globally during 2022, a rebound is forecast this year – to around US$1 trillion in issuance, forecasts S&P Global.

Asia Pacific (APAC) is well-placed to capitalise on this upswing. S&P Global’s projections, for example, are that GSS issuance volume in the region will jump by as much as 20%, to reach US$240 billion, roughly a quarter of the global landscape.

The longer-term story looks promising, too, especially amid ambitious climate goals. Even in South-east Asia alone, about US$180 billion needs to be invested in clean energy projects every year until 2030 to keep the transition journey on track, based on the International Energy Agency’s Sustainable Development Scenario. Putting this in context, from 2016 to 2020, investment in clean energy was $30 billion per year, on average.

Adapting to climate change is certainly a key driver. But according to more than 100 investors and borrowers in APAC who took part in the 6th annual poll by ANZ and FinanceAsia in April and May 2023, multiple dynamics indicate an ever-bigger role for GSS instruments.

Among the key factors is a mix of policy and regulatory initiatives to foster greater transparency. This should, in turn, boost investor demand and issuer appetite. At the same time, as this segment of the region’s capital market continues to mature, active GSS bond investors and issuers can expect greater potential for newer formats of issuance to help bridge social and environmental priorities such as biodiversity and gender equality.

10 top takeaways from the survey

92% of all respondents have integrated GSS factors within their strategy, with 77% confirming that the market volatility over the past 12-18 months either hasn’t changed or has increased their focus on GSS.
Nearly half (49%) of investors now have their own in-house ESG research and analysis capability, a notable increase from the 42% poll finding 12 months ago.
70% of investors have some type of experience with sustainable finance, with bonds much more popular than loans.
While just under one-third of investors have exposure to transition finance instruments, another 45% are interested in investing in them, either in the next year or over the medium to long term.
Although 92% of investors haven’t yet invested in Orange (gender equality) bonds, half of them say they would do so if they were more widely available.
88% of investors and 90% of borrowers believe further regulation of sustainability and sustainable finance would have a positive impact on the market overall.
49% of investors and 41% of issuers say a ‘greenium’ of at least 4 bps is typically priced-in to new GSS bond issues.
Alignment with sustainability objectives, better access to capital and investor diversification are the top three drivers for issuers of GSS instruments.
Time, availability of targets and set-up cost are the biggest hurdles to issuing GSS instruments.
Only 19% of borrowers have never issued a GSS instrument – compared with 64% in last year’s poll.

FinanceAsia Volume Two 2023 | FinanceAsia

By: Marcus Ching

On: July 11, 2023

In: Asia, Finance, South-East Asia

By now, most of our subscribers will have received print editions of the latest FinanceAsia Magazine: Volume Two 2023.

Over the course of the summer, we look forward to sharing online our in-depth magazine features, including the detailed rationale behind our jury’s selection of winners across our recent flagship FA Awards process.

You can access the full online edition here.

To whet your appetite, read on for our editor’s note.

Positive predictions

As a snake (according to the Chinese zodiac), I have so far fulfilled my Year of the Rabbit prophecy in securing opportunity for career growth within the Haymarket Asia business. A successor will soon have the good fortune to step up as editor in my place, as I become content and business director and oversee the editorial strategy of our finance publications: FinanceAsia, CorporateTreasurer and AsianInvestor.

It is said that those born in 2023 will be blessed with vigilance and quick-mindedness. Very useful personality traits, I would think, as artificial intelligence (AI) advances globally, at pace. We are witnessing great development in this field in Hong Kong – and across the wider Asian economy, as emerging tech becomes the next positive disruptor and the capital markets work to respond through evolving regulation and new listing regimes.

In this summer issue, Christopher Chu delves into the value disruption put forward by generative AI, with consultants estimating its worth to breach $16 trillion by 2030. He explores its sophistication and how its potential is interwoven with political factors, while questions are posed around data ownership.

Also intertwined within the realm of transformative technology, is this edition’s flagship interview with BNP Paribas’ CEO for Asia Pacific, Paul Yang. He shares his journey navigating a career path that has taken him from IT coding in Paris, to leadership of the bank’s Asia Pacific business. He offers insights around his accomplishments to date and details plans to progress the bank’s 2025 Growth, Technology and Sustainability (GTS) strategy.

Reviewing activity across Southeast Asia, Liza Tan inspects the market’s prominent position in the ongoing start-up story, through assessment of the current venture capital (VC) fundraising landscape. Her discussion with experts asserts that fintech is inherently fused with human approach and that quality conversations and connections are key to future success.

Indeed, as FinanceAsia’s recent in-person awards celebration underlined, we have much to look forward to in the second half of the year and it is the human elements involved in dealmaking that have capacity to shape the road ahead. I think we all agree that recognising and nurturing talent is vital and so I hope you enjoy reading our evaluation of market resourcefulness, ingenuity and skill that informed the jury’s selection of award winners, amongst truly outstanding competition.

Finally, Sara Velezmoro and I explore the outlook for Asia’s debt capital markets – investigating what opportunity is on offer alongside the changing environment; and whether the momentum surrounding Japanese equities can be sustained, if the government were to reverse yield curve control.

Amid uncertainty we must focus on potential, so please join me in acknowledging the positive strides being taken by Asia’s market movers.

Ella Arwyn Jones

(Please feel free to send feedback or suggestions to [email protected])

SocGen announces new Asian leadership roles | FinanceAsia

By: Marcus Ching

On: July 11, 2023

In: Asia, Finance, South-East Asia

Paris-headquartered Société Générale has announced via media note two newly created leadership appointments within its global banking and advisory businesses.

In addition to her role as head of Corporate Coverage for Southeast Asia, Singapore-based Eliza Ng becomes head of Global Banking and Advisory for the Southeast Asian region; meanwhile, Kanta Murata takes on responsibility for Japan as market leader of Global Banking and Advisory, alongside his current capacity as Japan head of Corporate Client Coverage and deputy branch manager of the bank’s Tokyo office.

Effective from the end of June, the appointments mark the bank’s continued commitment to strengthen its local capabilities to support clients in local markets, the release detailed.

In their new roles, the pair will supervise all global banking and advisory endeavours, excluding business related to the bank’s institutional and debt capital markets (DCM) efforts. They both report regionally to Stephanie Clement de Givry, head of Global Banking and Advisory for Asia Pacific; and to Olivier Vercaemer, her deputy.

Ng and Murata shared with FinanceAsia their priorities as they settle into their new functions.

“My priorities revolve around three main areas: customer-oriented approach; regulatory compliance and credit risk management; and growth, especially across ESG-related aspects,” said Murata.

He emphasised his work to enhance client experience through expertly structured finance arrangements to meet evolving market needs, while prioritising robust risk management practices to ensure the security and stability of the bank’s operations.

The ESG arena is another area where he targets expansion. “To stay competitive and relevant in a rapidly evolving ESG landscape, it is essential to embrace innovative approaches,” he explained.
Ng agreed that ESG is embedded in the bank’s business and is a focus for the regional teams.

“My immediate priority is to leverage the expertise and capabilities that our expanded franchise can offer our clients in the Southeast Asia region,” she said, adding that she looks forward to continuing to accompany clients on their energy transition aims.

This effort, she explained would complement and further support development across the region’s emerging economies.

Ng added that such regional sustainability efforts are bringing with them new business opportunities across several segments, “including the transportation value chain and new technologies in the renewable energy sector.”

Murata also observes a trend towards decarbonisation across Japanese activity.

“According to the latest preliminary figures as of 1Q23, the Bank of Japan’s “Flow of Funds” [demonstrate that] the loan balance of private non-financial corporations has been steadily growing during past quarters; partly driven by economic recovery, capital expenditure, and ESG-related investment opportunities.”

He said that this growth opportunity is further supported by the Japanese government’s push for carbon neutrality by 2050, which will require more than JPY150 trillion ($1 trillion) in investment from public and private sectors over the next ten years.

In terms of landmark deals, both Ng and Murata have been involved in a number of the bank’s key transactions.

Murata pointed to his involvement in an accelerated bookbuild for a Japanese client that saw the bank organise a block trade so it could divest European stocks; meanwhile, Ng highlighted the bank’s role across Temasek Financial’s EUR 1.5 billion ($1.65 billion) four and ten-year dual tranche senior unsecured bonds, earlier this year.

ADDX appoints former SGX leader to board | FinanceAsia

By: Marcus Ching

On: June 20, 2023

In: Asia, Finance, South-East Asia

Singapore-based digital securities exchange, ADDX, has appointed former Singapore Exchange (SGX) senior managing director, Sutat Chew, as chair.

Chew brings to the firm over 25 years of experience across financial services, including 14 years spent at the Singaporean bourse, where he led the global sales origination team and helped the business expand across 10 international locations. In terms of other prior experience, he has held senior roles at Standard Chartered, OCBC Securities and DBS.

The leadership appointment offers ADDX strategic direction as it looks to expand overseas. Specifically, Chew will be responsible for driving growth and innovation, the company release stated.

Speaking to FinanceAsia, Chew said that his priorities in coming on board involve cultivating strategic collaborations and partnerships so that ADDX is “poised to advance” its mission to democratise investment for wealth creation.

“We hope to meet the needs of customers in North Asia and the Middle East in the second half of this year through appropriate partnerships and joint ventures (JVs),” he said.

Operating on a private, permissioned blockchain that is regulated by the Monetary Authority of Singapore (MAS), ADDX offers issuers access to a larger pool of capital than is available through traditional fundraising means.

The platform’s employment of sophisticated digital processing technology enables it to manage the issuance, custody and distribution of private market products at a lower administrative cost compared to traditional markets and thus, the firm is able to reduce the fundraising entry threshold, inviting a wider community of investors to participate in capital exchange.

Regulation and innovation

Reflecting on progress and innovation across Asia’s capital markets, Chew said that it is the development of new forms of market infrastructure to support the advancement of digital assets, that excites him the most.

“Initiatives such as Project Ubin, Project Orchid and Project Guardian aim to explore the potential of blockchain and distributed ledger technology (DLT) in areas such as payments, settlements, digital identity, and cross-border transactions – which should enhance efficiency, transparency, and security in the financial sector,” he told FA.

He commended the efforts of Singapore’s market regulators in supporting the city-state’s development as a “world-class global financial hub with a highly competitive and diverse financial ecosystem.”

“Regulators here have been at the forefront of technology and innovation in the financial sector, balancing it with appropriate consideration for education and investor protection,” he explained.

“The progressive stance taken by the MAS in recognising that tokenised securities should be regulated in the same way as traditional securities, gives companies like ADDX clarity to invest and innovate for global clients who can trust the regime.”

Market uncertainty

However, Chew acknowledged that the uncertain market economic climate threatens the capital market advancement.

“One of the challenges to market innovation is reduced investor confidence and risk aversion as part of the uncertain market environment. As investors become more cautious and conservative, that may result in more gradual adoption of new ideas, technologies, and investment opportunities.”

“What we have done is adapt to evolving investor sentiment and risk appetite, communicate transparently, as well as actively educate and engage investors to address their concerns, provide reassurance and offer a suite of products that meet their needs.”

As an example, he shared that the platform had helped four issuers raise more than S$650 million via commercial papers to meet near-term investment needs.

“I believe that regulators and responsible startups or fintech players can continue to work together to keep pace with emerging technologies and financial innovation, whilst striking a balance with appropriate regulatory safeguards,” he added.

In addition to Chew, ADDX’s board comprises Oi-Yee Choo, who serves as CEO; and Inmoo Hwang, the firm’s COO.

Chew also serves as chair of ADDX’s listing committee, a position he has held since 2019; and he has been a board member of ICHX Tech – ADDX’s holding company – since 2018. MAS approved the operational transfer of ADDX from ICHX Tech in May 2022, and the platform began is regulated activities from September the same year.

ADDX’s shareholders include SGX, the Stock Exchange of Thailand, Temasek subsidiary, Heliconia Capital, the Development Bank of Japan, UOB and Hamilton Lane, among others. In April last year, it partnered with UOB to execute the largest foreign currency digital bond in Singapore to date; a sustainability-linked bond, issued by Singtel.

“Hong Kong to emerge as stock exchange of choiceâ â Dealmaking experts | FinanceAsia

By: Marcus Ching

On: June 13, 2023

In: Asia, Finance, South-East Asia

Former Securities and Futures Commission (SFC) senior director, Roger Cheng, is set to join UK-headquartered law firm, Linklaters, at its Hong Kong base from August.

The move follows his nearly five years of experience at the special administrative region’s (SAR) financial regulator, where Cheng oversaw the operations of the Takeovers Team. The law firm’s announcement pointed to the instrumental role that he played during this time, developing Hong Kong’s takeovers and mergers policy, as well as driving forward other listing-related progress.

Prior to his tenure with the SFC, Cheng spent 13 years at Slaughter and May.

Offering some thoughts around trends affecting dealmaking in Hong Kong and China, Betty Yap, Linklaters partner and global co-head of the firm’s Financial Sponsor Group shared that there had been a noticeable rebound of M&A activity in the region post-pandemic, though activity has not yet returned to pre-pandemic levels.

“Inbound investment into mainland China is still somewhat marred by geo-politics and recent regulatory changes,” she told FinanceAsia, adding that her team is optimistic around sectors less affected by national security concerns, such as the consumer segment.

“Interest from Middle Eastern investors in M&A opportunities in China has increased as relations between [both] continue to strengthen. We are also seeing a number of sales by private equity (PE) sponsors in the market, as investments made in prior years mature,” she continued.

Her colleague, Hong Kong-based partner, Xiaoxi Lin, noted that recent financial stress in the Chinese real estate market has presented interesting M&A opportunity in Hong Kong, through the sale of prime commercial and residential properties to generate cashflow and service restructuring debts.

“A cocktail of factors including the distress in the PRC real estate sector, rising interest rates, and regulatory restrictions have meant that commercial banks are reducing their exposure to the real estate sector, including loans secured by residential and commercial properties,” Yap said.

“Credit funds – who are not subject to the same regulatory restrictions – are stepping into this funding gap,” she added, highlighting that while the current elevated interest rate environment means that borrowing costs are higher, credit funds are able to provide financing on the back of higher loan-to-value (LTV) ratios and can offer swift deal execution.

IPO dynamics

In terms of the IPO landscape ahead, Lin told FA, “Market participants are cautiously expecting a stronger HK IPO market this year with more companies listed than in 2022”.

Corporate partner, Donnelly Chan, added that Hong Kong’s recent introduction of the Chapter 18C regime – which reduces the listing requirements threshold for firms operating in new economy industries – together with recent China Securities Regulatory Commission (CSRC) reforms, is likely to support the market’s advancement.

“The track record and proven success of the pre-revenue Biotech listing regime and the weighted voting rights (WVR) listing regime since their introduction in 2018, coupled with the concession route for Greater China companies to secondary list on the main board has demonstrated the Hong Kong market’s flexible approach and readiness to evolve and explore opportunities,” he told FA.

Chan added that, as a result, it is hoped Hong Kong’s bourse will become “the stock exchange of choice” compared to other regional fundraising hubs.

Opportunity elsewhere

However, Yap is bullish on opportunity across the full breadth of Asian markets.

“For the remainder of 2023, we believe there will be continued interest in M&A opportunities in Asia,” she told FA.

“As inbound investment interest in China remains mixed given geo-politics, other single jurisdiction markets in Asia that can provide scale will be of interest to financial sponsor investors looking for efficiency in the deployment of capital.”

She pointed to markets such as India and Japan as benefitting from investor appetite – with the latter offering attractive costs “because of the lower yen”.

Yap added that Southeast Asia will continue to draw capital: “in particular Indonesia, with its relatively young demographics and the consumption power of its growing middle class.”

In terms of sectors, she noted that energy transition will remain of utmost importance “with interest in targets from renewables to electric vehicles to batteries to de-carbonising assets,” while digital infrastructure and data centre investment will continue to support the rise of e-commerce.

In the Linklaters release, head of Corporate, Sophie Mathur shared, “We are delighted to welcome Roger to our corporate practice. We are confident that his insights into takeovers and mergers regulations and policy matters will be of immense value-add to our clients when navigating take-privates and other public market transactions.”

Unlike the typical structure of a corporation, Linklaters employs a limited liability partnership which enables the firm’s partner leadership-base to make long-term strategic decisions for the business together.

Cheng’s appointment follows other key hires in Asia in recent months, including the appointment of Yoshiyuki Asaoka as corporate partner in Japan. In June 2021, William Liu was appointed as regional managing partner for Asia Pacific.

Winners: FinanceAsia Awards 2022-2023 Southeast Asia | awards, financeasia awards, southeast asia, sustainability, impact, esg, flagship awards, annual winners, 27th iteration | FinanceAsia

By: Marcus Ching

On: May 15, 2023

In: Asia, Finance, South-East Asia

Still reeling from the effects of last year’s supply chain woes, energy disruptions and geopolitical tensions, financial markets are now also contending with the impact of consecutive interest rate hikes and uncertainty following recent banking turmoil.

While 2023 may not deliver the capital markets rebound we were all hoping for, it is worth pausing to recognise leading financial institutions that have forged through and made waves in these volatile times.

Marked progress and innovation across deals continues to demonstrate regeneration and resilience. After all, the goal posts have not changed: each of Asia’s markets is bound by net zero commitments; and digital transformation continues to drive regulatory discourse and development around emerging sectors and virtual assets. As a result, sustainability and digitisation continue to be underlying themes shaping a new paradigm for deal-making in the region.

The FinanceAsia team invited banks, brokers and ratings agencies to showcase their capabilities to support their clients as they navigated these uncertain economic times. Our awards process celebrates those institutions that showed determination to deliver desirable outcomes, through display of commercial and technical acumen.

This year marks the 27th iteration of our FinanceAsia awards and celebrates activity that has taken place within the past year (2022).

To reflect new trends, this year we introduced an award for Biggest ESG Impact (encompassing all three elements of ESG strategy) and updated our D&I award to include equity: Most Progressive DEI Strategy.

Read on for details of the winners for Southeast Asia. Full write-ups explaining the rationale behind winner selection will be published in the summer edition of the FinanceAsia magazine, with subsequent syndication online.

Congratulations to all of our winners!

*** SOUTHEAST ASIA ***

CLM (CAMBODIA, LAOS, MYANMAR)
Domestic
Best Bank: Cambodian Public Bank
***

INDONESIA
Domestic
Best Bank: PT Bank Central Asia
Best Broker: PT Mirae Asset Sekuritas
Best DCM House: PT Mandiri Sekuritas
Best ECM House: PT Mandiri Sekuritas
Best ESG Impact: PT Bank Mandiri
Best Investment Bank: PT Mandiri Sekuritas
Best Sustainable Bank: PT Bank Mandiri
Most Innovative Use of Technology: PT Bank Mandiri
Most Progressive DEI: PT Bank Rakyat Indonesia

International
Best Bank: BNP Paribas
Best Investment Bank: BNP Paribas
Best Sustainable Bank: MUFG
***

MALAYSIA
Domestic
Best Bank: Public Bank Berhad
Best DCM House:
Winner: CIMB Investment Bank
Finalist: Maybank Investment Bank
Best ECM House: Maybank Investment Bank
Best ESG Impact: Public Bank Berhad
Best Investment Bank:
Winner: Maybank Investment Bank
Finalist: CIMB Investment Bank
Best Sustainable Bank:
Winner: Public Bank Berhad
Finalist: Maybank Investment Bank
Most Progressive DEI: CIMB Bank

International
Best Bank: Citi
***

PHILIPPINES
Domestic
Best Bank: BDO Unibank
Best DCM House:
Winner: BPI Capital Corporation
Finalist: China Bank Capital
Best ECM House:
Winner: First Metro Investment
Finalist: China Bank Capital
Best ESG Impact: Bank of the Philippines Islands
Best Investment Bank:
Winner: First Metro Investment Corporation
Finalist: SB Capital Investment Corporation
Best Sustainable Bank: Bank of the Philippine Islands

International
Best Bank: HSBC
Most Progressive DEI: Citi
***

SINGAPORE
Domestic
Best Bank: DBS Bank
Best Broker: CGS-CIMB Securities
Best DCM House: United Overseas Bank
Best ESG Impact: DBS Bank
Best Investment Bank: DBS Bank
Best Sustainable Bank: DBS Bank
Most Innovative Use of Technology: DBS Bank

International
Best Bank: Citi
Best Investment Bank: Citi
Best Sustainable Bank: MUFG
Most Progressive DEI: Citi
***

THAILAND
Domestic
Best Broker: InnovestX Securities Co., Ltd.
Best ECM House: Kiatnakin Phatra Securities PCL
Best DCM House: Kasikornbank
Best Investment Bank: Kiatnakin Phatra Securities PCL
Best Sustainable Bank: Bangkok Bank PCL
Most Innovative Use of Technology: InnovestX Securities Co., Ltd

International
Best Bank: HSBC
Best Investment Bank: Citi
Best Sustainable Bank: MUFG
Most Progressive DEI: Citi
***

VIETNAM
Domestic
Best Bank: Techcombank
Best Broker: SSI Securities Corporation
Best Investment Bank:
Winner: Viet Capital Securities Corporation
Finalist: SSI Securities Corporation
Best DCM House: SSI Securities Corporation
Best ECM House:
Winner: Viet Capital Securities JSC
Finalist: SSI Securities Corporation
Best ESG Impact: Saigon-Hanoi Commercial Bank
Most Innovative Use of Technology: TechcomSecurities

International
Best Bank: HSBC
Best ESG Impact: HSBC
Best Investment Bank: HSBC
Best Sustainable Bank: Citi
Most Innovative Use of Technology: HSBC

***

For other winners:

Click here to see the winners across North Asia.

Click here to see the winners across South Asia.

North Asia (Page 5)