Money

Goldman Sachs takes top spot in Asian stock sales

By Cathy Chan (China Daily)
Updated: 2010-10-14 09:46

HONG KONG - Goldman Sachs Group Inc has vaulted past Morgan Stanley to become the top arranger of stock sales in Asia outside Japan for the first time since 2005.

The advance came after Goldman Sachs divested a $2.25 billion stake in Industrial & Commercial Bank of China Ltd (ICBC) two days before the end of the third quarter.

The ICBC sale was one of four deals the stock company completed in the last two days of September to overtake Morgan Stanley with 14.9 percent of the market.

That is its biggest share since 2006, according to data compiled by Bloomberg.

Goldman Sachs pushed into the top slot as equity offerings in the region surged to $81 billion, marking the best first nine months since 2007, Bloomberg data shows.

Helping drive the climb from third a year earlier were stake sales in ICBC and China Mobile Ltd, the phone carrier Goldman Sachs took public in 1997 and which is now the world's sixth-largest company by market value.

"Asia ex-Japan has been a hot spot for equity capital markets and it can easily bear more deals given the recent stock-market rally there," said Christopher Palmer, who oversees about $6 billion as the London-based head of global emerging markets at Gartmore Investment Management Ltd.

The MSCI Asia-Pacific Ex-Japan Index rallied 12 percent in September, its best monthly performance since July 2009.

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The four offerings Goldman Sachs completed on Sept 29 and Sept 30 raised a combined $3.15 billion, according to Bloomberg's data. Morgan Stanley finished three deals between Sept 28 and 30 worth a total of $925 million, taking its nine-month market share to 12 percent.

Prior to Sept 28, the two firms were almost in a tie for the No 1 spot.

Goldman Sachs expanded its investment-banking workforce in China by 40 percent this year as part of a push to help more local companies sell shares, Thomas Deng, the firm's head of China equity capital markets, said last month.

Deng, formerly Goldman Sachs' chief China strategist in Hong Kong, was appointed to his current role in March. The same month, the bank said it hired William Smiley from HSBC Holdings Plc as equity syndicate co-head in Hong Kong. Steven Barg, the former UBS AG capital-markets chief for Asia, joined two months later as regional co-head of equity capital markets.

"We've made the right investments in people and clients ahead of what's become an extraordinary level of market activity," Dan Dees, head of Goldman Sachs' Asia financing group. Nineteen of the 33 stock offers Goldman Sachs arranged in the nine-month period were by Chinese companies. Those deals raised a combined $25.4 billion.

Bloomberg News