Maybank expects equity deals in Southeast Asia to rise this year

KUALA LUMPUR: Malayan Banking Bhd (Maybank), Southeast Asia’s top arranger of equity fundraising deals, is anticipating transactions in the region to rebound from a five-year low on the back of an improved economic outlook.

Share sales and rights offerings were likely to come from industries including power, infrastructure and consumer products, said Maybank Kim Eng chief executive officer Datuk John Chong recently.

Part of the activity would come from companies that had deferred deals last year, he said.

Equity sales and rights offerings by Southeast Asian companies fell to US$29 billion (RM128 billion) last year, 15 per cent below the previous year and the lowest since 2011, according to data compiled by Bloomberg.

Deals slumped as a slowdown in China, weaker exports and a collapse in commodity prices hurt Southeast Asia’s major economies the past two years.

“We are looking at a much improved market this year,” said Chong, whose team is involved in three initial public offerings in Malaysia, Thailand and Singapore that are seeking to raise a combined US$1.2 billion.

“The outlook is more positive and the momentum has picked up quite a bit.”

Maybank was the top-ranked arranger of Southeast Asian equity and equity-linked offers last year, with US$1.1 billion of deals, data compiled by Bloomberg show.

While he was optimistic about deal flow, Chong struck two cautionary notes: geopolitical issues, especially in Europe and the United States, and volatile commodity prices could still upset the positive outlook for the year.

“I won’t say I am bullish. I am saying the market is improving definitely, but there are still uncertainties.” Bloomberg