China’s One Belt One Road (OBOR) offers substantial opportunities to connect Asia
by Kathy Liu, MD, Head of One Belt One Road, CLSA
President Xi Jinping’s One Belt One Road (OBOR) initiative aims to increase trade flows between China and the world with a coordinated infrastructure spending programme spanning 65 countries. To date, China has established 56 economic cooperation zones (ECZs) with more than 20 nations and 10 newly signed free trade agreements, with more in the pipeline. Economic data indicates that intra-Asia trade volume is a key growth driver. China’s Overseas Direct Investment (ODI) in the form of cross-border M&A, joint ventures and green field investments jumped to US$170bn in 2016, up 89% from US$90bn in 2013. China’s ODI exceeded foreign direct investment (US$126bn) in 2016 and should continue to outpace it.
For the past 20 years, CITIC CLSA’s corporate finance and capital markets business has been involved in over 850 capital market transactions, assisting our corporate clients in fund raising. Under the OBOR banner, CITIC CLSA has completed capital raises and advisory work for corporates and sovereigns in India, Sri Lanka, Vietnam, Malaysia, Indonesia, Thailand, Philippines, Singapore and Australia, in addition to those based in HK/China.
With China’s outbound expansion still at the midway point of its upcycle in terms of solidifying relationships with OBOR peers, we see many opportunities, especially for construction and equipment companies, to benefit from bilateral agreements through infrastructure collaboration. Increasingly, we find Chinese buyers focusing on specific assets and businesses that have real strategic value, especially where a brand, technology or product capability can be taken back to China and used to drive stronger growth or improve competitive positioning.
CITIC CLSA’s corporate finance and capital team is uniquely positioned to provide both cross-border advisory services and international capital raising for our OBOR clients. CITIC CLSA has established strong relationships with leading conglomerates, investors, regulatory bodies and other financial institutions in many OBOR countries including Singapore, Malaysia, Philippines, Indonesia, Thailand, India and Sri Lanka.
Click here to learn more about OBOR.
We are focused on long term value creation.
Our priority is to ensure sustainable and long term value creation for our clients. For more than two decades we have advised companies, governments, insurers and investors seeking access to capital markets, restructuring and pursuing strategic investment opportunities. We have worked on numerous, significant capital raising and M&A deals across Asia, helping companies to reach their strategic goals.
Unparalleled access to China.
With significant presence and local connections in China, our parent company CITIC Securities provides local background, innate knowledge of China’s regulatory framework and comprehensive understanding of developments within all major industries across the country.
As the international arm of CITIC Securities’ global investment banking business, CITIC CLSA Securities leverages the breadth and deep relationships of 400+ bankers at China’s largest investment bank and is the ideal partner for Chinese companies aspiring to invest overseas, as well as foreign companies seeking Chinese capital for growth and expansion.
China, being one of the fastest-growing markets globally, continues to develop its domestic market, upgrade infrastructure and revive transcontinental trading routes via its Belt and Road initiative. With a considerable amount of capital expected to exit the country, along with foreign capital investments into China, CITIC CLSA Securities is best placed to capture the mass of capital inflows and outflows that China will be dominating over the next couple of decades.
CITIC CLSA Securities is in an inimitable position due to its extensive on-the-ground contacts, which multi-national investment banks do not typically have, together with established relationships within the global investment community, rarely accessible by local Chinese securities firms.
CITIC CLSA Securities is a market leader in equity and debt capital markets and has completed a number of significant ECM, DCM and M&A deals across the region:
Equity Capital Markets
- China Development Bank Financial Leasing Co. Ltd. – Joint Sponsor, Joint Global Coordinator, Joint Bookrunner of US$800 million IPO (2016)
- CITIC Securities – Sole Global Coordinator, Sole Placing Agent of US$3,490 million New Shares Placement (2015)
- Indiabulls Housing Finance Ltd. – Global Coordinator, Bookrunner for QIP Issue of US$600 million (2015)
Debt Capital Markets
- Bank of China Ltd. – Joint Bookrunner and Joint Lead Manager for first and largest offshore additional tier one capital offering by a Chinese bank (2014)
- CITIC Ltd. – Joint Global Coordinator, Joint Bookrunner and Joint Lead Manager for jumbo USD bond offering by CITIC Ltd., China’s largest conglomerate (2016)
- Oceanwide Co., Ltd. – Joint Global Coordinator, Joint Bookrunner and Joint Lead Manager for all high yield bond offerings by leading Chinese real estate developer (2016, 2015 & 2014)
Mergers & Acquisitions
- China Orient Asset Management (International) Holding Ltd. – Sole Financial Advisor on the acquisition of 50.03% stake in Shanghai Zendai Property Ltd. (2015)
- Integrated Clinical Oncology Network Pty Ltd. – Financial Advisor on the landmark acquisition of Singapore Oncology (2016)
- Security Bank Corporation – Sole Financial Advisor on the sale of a 20% stake to Bank of Tokyo-Mitsubishi UFJ (2016)