Widely considered as Asia's largest lender, DBS Group Holdings was recently reported to be working on an expansion plan to extend its fixed-income business in China. This move is seen by many market analysts as a strategic move which is part of the company's effort to bring more first-time bond issues into the world's second-largest economy.
DBS Capital, which is based in Singapore, has recently set up a new debt capital market product. Along with this, the company also established an advisory team in China whose main job is to focus on attracting more local clients into their business model. This was confirmed by DBS Group head of fixed income Clifford Lee.
Headlining the DBS Group advisory team to China are three bankers based in Shanghai and Beijing. The group's leader is identified as Cleaven Yu who was appointed as the head of the company's China fixed income origination team back in June.
In a statement, Mr. Lee said that DBS Capital is expecting China's need for debt financing to grow exponentially within the foreseeable future. He added that several factors including the country's rising bank capital and financial backings for its infrastructure projects are just two of several major factors that will paint China as a lucrative region to do business.
In terms of Asia's dollar bond issuance, Chinese borrowers are widely considered by many analysts are the most dominant force in the region. This particular niche of the market makes up about 60 percent of the total notes sold since the start of the year which amounts to as much as $198 billion. This is based on the data compiled by Bloomberg.
In terms of bond managers, DBS Capital is currently sitting in the 10th place among all the bond managers. The company holds 81 bonds, more than half of which are from Chinese companies.
Many market observers believe that DBS Capital's recent strategic move highlights the company's interest in making itself closer to Chinese companies. This is part of the general effort of attracting more businesses, especially in the world's second-biggest economy which is now slowly opening its financial markets to global players.
Mr. Lee said that by establishing a localized operation in China, DBS Capital should be able to enhance its understanding of the local economy and market. This is important especially when it comes to regulations, something the constant changes in a market like China. This latest development comes as a positive note, especially after considering the fact that China and the United States are currently tied in a bitter trade war.
