UOB banks on Asean growth story

Driving on the area’s progress momentum, Asean gives more and more interesting alternatives for capital elevating and advisory providers that UOB is concentrated on tapping into.

“We see enormous alternatives in Asean,” mentioned Leong, pointing to the huge scope for cross-border commerce, which UOB estimates is value greater than $2 trillion. “This may also drive numerous the exercise in FDI flows that may create CapEx and M&A alternatives.”

The financial institution is effectively positioned to capitalise on these. Its world community counts over 500 places of work in Southeast Asia, Higher China and around the globe, catering to massive, medium and small enterprises from multinationals and sovereign wealth funds, to monetary sponsors and the SME sector.

“We concentrate on the thematics and the options that drive financial exercise and cross-border commerce within the area,” added Leong.

A promising issuance outlook

Inside Asean, UOB sees two key drivers for issuance quantity: refinancing and progress capital.

The potential for refinancing can’t be underestimated. In response to Leong, greater than $300 billion in bonds might be due for refinancing in Asia ex-Japan over the following 12 months. And final 12 months’s issuance quantity might solely fulfill half of that.

Consequently, he defined, with rates of interest within the US staying greater for longer, UOB envisages Asean native forex markets to have the ability to fulfill these wants.

In the meantime, progress capital will proceed to be an vital supply of issuance. “We see frequent issuers faucet the native bond markets. Additionally, with home funds and excessive web value liquidity chasing greater returns and yield, fairness capital markets will rebound by way of IPOs,” mentioned Leong.

Thematics to drive Asean’s potential

A number of supportive thematics additionally underscore the area’s potential for capital elevating and advisory providers.

Firstly, the availability chain shift – each by way of China+1 in addition to Western companies getting into Asean – will gasoline numerous CapEx wants and financing throughout sectors comparable to high-end electronics in Vietnam and Malaysia.

Auto manufacturing is one other progress story, particularly in Thailand and Malaysia, together with the electrical automobile provide chain, together with battery assets in Indonesia.

Knowledge centres signify one other sector the place Leong sees vital alternative. This in flip drives manufacturing of synthetic intelligence-related tools, plus the necessity for energy, and particularly, renewables infrastructure.

On the identical time, home consumption continues to be sturdy inside Asean, together with excessive round progress sectors like healthcare, training and logistics.

A differentiated set of options

To anchor UOB’s Asean imaginative and prescient is what Leong describes as a well-balanced and counter-cyclical funding banking platform that may stand up to headwinds from volatility, plus profit from the tailwinds of sturdy public markets. “Our strengths have at all times been specializing in shopper wants and being much less transactional.”

This strategy is rooted in three core methods: connectivity, customised options and sustainability.

For instance, connectivity stems from UOB’s providing because the One Financial institution for ASEAN. “Now we have at all times been capable of provide a broad vary of funding banking providers to our shopper base who’re energetic on this area,” Leong mentioned.

The financial institution is ready to ship these by bringing collectively groups that may present customised multi-product capital markets and advisory options. “This has been important for us to win and safe repeat mandates from shoppers,” he defined.

To enrich these dynamics, UOB has constantly organized $40 billion to $50 billion in sustainability financing throughout the area yearly. Additional, added Leong, UOB was the primary bookrunner and mandated lead arranger in 2024 for inexperienced loans in Asia ex-Japan.

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