UOB banks on Asean growth story |Asian Markets
Driving on the area’s growth momentum, Asean provides more and more interesting alternatives for capital raising and advisory providers that UOB is concentrated on tapping into.
“We see huge opportunities in Asean,” stated Leong, pointing to the huge scope for cross-border trade, which UOB estimates is price more than $2 trillion. “This will also drive a lot of the activity in FDI flows that will create CapEx and M&A opportunities.”
The bank is properly positioned to capitalise on these. Its world community counts over 500 workplaces in Southeast Asia, Larger China and across the world, catering to massive, medium and small enterprises from multinationals and sovereign wealth funds, to financial sponsors and the SME sector.
“We focus on the thematics and the solutions that drive economic activity and cross-border trade in the region,” added Leong.
A promising issuance outlook
Inside Asean, UOB sees two key drivers for issuance quantity: refinancing and growth capital.
The potential for refinancing can’t be underestimated. Based on Leong, more than $300 billion in bonds will likely be due for refinancing in Asia ex-Japan over the subsequent 12 months. And final yr’s issuance quantity may solely fulfill half of that.
As a outcome, he defined, with rates of interest within the US staying greater for longer, UOB envisages Asean native currency markets to have the ability to fulfill these wants.
In the meantime, growth capital will proceed to be an important source of issuance. “We see frequent issuers tap the local bond markets. Also, with domestic funds and high net worth liquidity chasing higher returns and yield, equity capital markets will rebound in terms of IPOs,” stated Leong.
Thematics to drive Asean’s potential
A number of supportive thematics additionally underscore the area’s potential for capital raising and advisory providers.
Firstly, the availability chain shift – each in phrases of China+1 in addition to Western companies coming into Asean – will fuel a lot of CapEx wants and financing throughout sectors comparable to high-end electronics in Vietnam and Malaysia.
Auto manufacturing is one other growth story, particularly in Thailand and Malaysia, together with the electric vehicle provide chain, together with battery assets in Indonesia.
Knowledge centres symbolize one other sector the place Leong sees important alternative. This in flip drives manufacturing of artificial intelligence-related tools, plus the need for energy, and particularly, renewables infrastructure.
On the similar time, home consumption continues to be sturdy within Asean, together with high round growth sectors like healthcare, schooling and logistics.
A differentiated set of options
To anchor UOB’s Asean imaginative and prescient is what Leong describes as a well-balanced and counter-cyclical investment banking platform that may stand up to headwinds from volatility, plus benefit from the tailwinds of sturdy public markets. “Our strengths have always been focusing on client needs and being less transactional.”
This strategy is rooted in three core methods: connectivity, customised options and sustainability.
For instance, connectivity stems from UOB’s offering because the One Financial institution for ASEAN. “We have always been able to offer a broad range of investment banking services to our client base who are active in this region,” Leong stated.
The bank is ready to ship these by bringing collectively groups that may present customised multi-product capital markets and advisory options. “This has been critical for us to win and secure repeat mandates from clients,” he defined.
To enrich these dynamics, UOB has persistently organized $40 billion to $50 billion in sustainability financing throughout the area yearly. Additional, added Leong, UOB was the primary bookrunner and mandated lead arranger in 2024 for inexperienced loans in Asia ex-Japan.
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