Capital Markets

Southeast Asia is driving increased equity market activity within the region, but it’s a different game further north.

Southeast Asia’s capital markets are buzzing, making them hot favourites with global investors. But be warned: some big obstacles are expected in the months ahead, testing the ability of issuers and investment banks to get deals over the line.

President Ferdinand Marcos Jr’s latest policy splash is the $8.8 billion Maharlika Investment Fund, a sovereign wealth vehicle that aims to boost growth and inward investment. But it has drawn criticism, even within Marcos’s family. Many highlight the cautionary tale of Malaysia’s 1MDB, and fret about the capacity for corruption and poor governance.

Outbound Chinese M&A deal-flow has slowed to a crawl even as inbound activity remains steady. So focus in the region is moving elsewhere: to rising India, steady-and-lucrative Australia and even Japan, where once-bloated conglomerates are streamlining portfolios under intense pressure from activist shareholders.

Issuance has barely stopped in Indonesia’s IPO market this year. Global investors have bought into the resource-led story with glee – and there are plenty of deals in the pipeline.

Indonesia is one of the world’s brighter prospects right now: growth, demographics, infrastructure momentum, inflation under control, more equity raised in the first quarter in Jakarta than New York. Banks are positioning to benefit – while keeping an eye on next year’s elections.

Investors in Asia are still reeling from the shock write-off of Credit Suisse’s additional tier-1 bonds, threatening future demand for the product from the region’s ultra-wealthy.

How on earth, in this environment, did the bank deliver one of its best-ever quarters in Asia?

Fund managers see big opportunities in Asia’s private credit market.