Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : Booms, Busts, and Recoveries -- Ignore unavailable to you. Want to Upgrade?

To: TobagoJack who wrote (39907)	10/21/2003 6:31:22 PM
From: elmatador	Respond to of 74559

Banks accept record low fee for Asian bond <<lowest ever for an Asian government bond issue>> This gives a glimpse of what could happen when capital starts flying off the economies that have it but lack economic acivity to the countries that have economic activity but lack capital. It will very interesting to watch as countries reach peak population. Banks accept record low fee for Asian bond By Francesco Guerrera in Hong Kong Published: October 19 2003 20:51 \| Last Updated: October 20 2003 21:36 HSBC, Morgan Stanley and UBS have shared a fee of just six basis points for a $750m bond from the Philippines - a sign of the fierce competition faced by investment banks in the region. It is understood the three banks agreed to receive a total of $450,000, the lowest ever for an Asian government bond issue, to arrange the bond for the Manila government, and a further $300,000 - or 10 basis points - for a related $300m bond. The record low payment comes as investment banks have been struggling to gain profitable business in Asia following a collapse in business during the Sars outbreak this year. Rival bankers said the fees, which beat the previous low of 13 basis points for another Philippine sovereign bond last year, could persuade other governments and companies to reduce payments to investment houses dramatically. "It's a bad sign. I hope other clients don't decide that because the Philippines are doing this, they should be doing this too," said the head of debt and capital markets at a Hong Kong-based bank said. HSBC, Morgan Stanley and UBS declined to comment. Some bankers said that with such low fees it would be impossible for the banks to make a profit on the transaction, given the time and cost of the bankers involved. However, others said the three institutions might have made a small profit on the bond. They said the deal was easier than most bonds as it entailed issuing more of existing Philippines' bonds maturing in 2014 and 2025 rather than arranging a new issue. Bond experts said the three banks decided to bid low because the Philippine bonds could improve their position in the industry league tables - a key marketing tool. So far this year, HSBC and UBS are numbers three and five respectively in the debt league tables for Asia-Pacific excluding Japan, compiled by Dealogic, the research company. For Morgan Stanley, which is not in the top 10, the deal could provide a much-needed end-of-year boost. It is also involved in a $2.2bn bond for Singapore Power.

To: TobagoJack who wrote (39907)	10/22/2003 9:18:44 PM
From: elmatador	Respond to of 74559

After <<lowest ever for an Asian government bond issue>> <<China made a spectacular return to the international bond markets... spread is the lowest-ever for an Asian issuer apart from Japan, with the dollar tranche priced roughly at the same level as that of US agencies, which have an implicit government guarantee...very close to those achieved by western government agencies.>> news.ft.com These is the shape of things to come. Cheap capital to fuel growth.