Irrespective of sector, industry, or geographic location, 2023 was a challenging year with markets beset by escalating geopolitical crises, rising interest rates, and a slower than anticipated post-pandemic recovery. Some of these challenges are expected to persist through early 2024.
However, the Singapore-based UOB has been able to meet these challenges, withstand the headwinds and benefit from the tailwinds. The bank is now in a good position in anticipation of improvements in public markets expected to play out through this year.
Edmund Leong, head of group investment banking, UOB said, “We have built a very well balanced and counter cyclical investment banking platform, now present across major jurisdictions including ASEAN, Greater China, as well as Australia, the UK, and the US. The key is to not be purely transactional. We are very focused on our core strategies: connectivity, customising solutions for clients, and sustainability.”
Elaborating on these aspects, he explained that connectivity is key to UOB's ‘one bank for ASEAN’ positioning. UOB is a market leading player in the debt arranger market in both loans and bonds, besides being a key mover in the equity capital markets in the region.
The bank’s customised approach for clients looking for multiproduct advisory and financing solutions has resulted in several repeat mandates.
When it comes to sustainability, Leong noted that the bank has arranged approximately S$50 billion (US$37.1 billion) equivalent in deal volumes as of last year in the form of ESG loans and bonds. For 2023, UOB was the number one bookrunner in terms of arranging syndicated loans for green use of proceeds for Apac ex Japan. In the video below, Leong discusses the growing importance of ESG, as well as trends in M&A and the fixed income space, and a time frame for the rationalisation of interest rates.
The Singapore bond market too is part of the comeback narrative. After experiencing a 20% drop in volumes, Leong said, “In 2024, it should rebound back to the usual S$25 billion (US$18.5 billion) to S$30 billion (US$22.3 billion) of deal volume. We are already seeing some very good transactions in the first quarter.”
Among these, UOB was the lead manager for ST Telemedia Global Data Centres, a Singapore-based data centre operator. STT GDC raised S$450 million in corporate hybrid securities. The final order book was over S$1 billion across seventy high quality accounts.
Leong said, “We expect healthy SGD bond market activity in Q1 2024 given the relative lack of primary issuances in Q4 2023 and high refinancing volumes of S$6.8 billion in Q1 2024. It clearly shows that institutional investors as well as high net worth individuals are putting money to work. We are confident that there will be a lot more issuances — about S$7 billion equivalent of maturities in the first quarter, with a lot of that coming to the bond market. With a combination of acquisitions, as well as capital expansions and refinancing, we truly believe that the Singapore dollar bond market will bounce back to the usual volumes in 2024.”
UOB’s ability to create bespoke strategies for its clients has helped the bank navigate a challenging period for businesses everywhere, besides earning it plaudits. UOB secured multiple wins at the recently announced FinanceAsia Achievement Awards, including Best Property House and Best Issuer – Financial Institutions, along with commendations for deals involving bonds, property, structured finance, and sustainable finance across Southeast Asia and Hong Kong.
