By Scott Murdoch
HONG KONG (Reuters) – UBS, lengthy the dominant financial institution in Australian equities markets, has closed this half-year outdoors the highest three for the primary time in 15 years, at the same time as a rush of coronavirus-related share gross sales have generated bumper funding banking charges.
Its slide to fourth place within the fairness capital markets (ECM) league desk has been attributed by rivals to the departure of a lot of senior bankers from the Australian operations, which have opened the way in which for rivals to focus on mandates historically dominated by UBS .
Such is the Swiss financial institution’s dominance in Australia, it has solely completed the yr off the ECM prime spot as soon as previously 15 years.
UBS’s market share in ECM fell from 22.8% within the first half of final yr to 12.4% now, rating it behind Macquarie with 23.4%, Goldman Sachs with 17.4% and JP Morgan with 14.8%, in line with Refinitiv.
The unit has lengthy been thought of a key energy for UBS’s broader enterprise and privately acknowledged as such by senior regional executives – an significance demonstrated by a 2012 settlement https://au.investing.com/information/stock-market-news/update-1ubs-head-in-australianz-matthew-grounds-to-leave-bank-at-year-end-1906456 to additional prolong a protected bonus pool for its prime rainmakers that was arrange in 2008.
Key among the many latest departures was that of chief govt Matthew Grounds, as soon as touted by billionaire James Packer as a “rock star” banker, who retired final yr as did his deputy Man Fowler.
Different senior exits embody capital markets boss Robbie Vanderzeil, who left final month to affix Jarden, a boutique funding financial institution the place he can even be joined by UBS’s former co-head of funding banking Aidan Allen.
UBS declined to touch upon its first-half efficiency.
ECM is a extremely aggressive enterprise world wide, prized for the charges its generates and the shut relationship it may possibly construct with purchasers, who usually want the funds in tough circumstances.
“ECM stays essentially the most worthwhile capital markets enterprise forward of DCM and M&A,” stated Alex Owen, analyst at banking knowledge supplier Coalition. “Its pushed by higher charges and secondary market exercise, whereas the allocation of sector specialists and analysis, and low margins related to bond underwriting, affect the profitability of M&A and (debt capital markets) respectively.”
Australia’s fairness markets have seen the busiest begin to the yr for the reason that world monetary disaster with corporations to date elevating $18.48 billion through share gross sales, in line with Refinitiv knowledge, as corporations sought to shore up steadiness sheets to assist climate the financial hit from the COVID-19 pandemic.
That stage is greater than double the identical time in 2019 and the very best since 2009, when $25 billion was raised within the first half, the info confirmed.
Goldman Sachs Australia chief govt Simon Rothery stated the usbank had set the goal two years in the past to extend its share of the home ECM in Australia and compete extra aggressively.
“ECM has been a serious focus for us,” Rothery stated.
“We have now been on the prime of the M&A league desk for a decade and the ECM payment pool is simply as massive, so we made it a strategic purpose to maneuver to a primary or two place in ECM in Australia.”
(Reporting by Scott Murdoch; Enhancing by Jennifer Hughes and Mark Potter)