Citigroup Inc. restored its position in Singapore equity sales this year after a two-year slump as the combination of the corporate and investment banking units helped it win work on the biggest initial public offerings.
The lender boosted its market share in underwriting equity offerings to 17.2 percent this year, its best showing in 11 years, from 2.8 percent in 2008, according to data compiled by Bloomberg. Citigroup, based in New York, rose to second place in the league table from 12th over the same period, behind DBS Group Holdings Ltd. Citigroup also ranked second in 2007.
Singapore companies have raised $6.3 billion in IPOs and secondary share sales this year, the most since 2007 and making the island-nation the biggest market in Southeast Asia. Citigroup’s Singapore team, led by head of global banking Tracey Woon, worked on this year’s two biggest IPOs, Global Logistic Properties Ltd. and Mapletree Industrial Trust.
“It’s amazing how just two years ago Citi was fighting for their survival,” said Richard Lai, chief executive officer of Mapletree Logistics Trust, which hired the bank this year as sole underwriter for a private share placement. “Sometimes surviving through a crisis helps galvanize a team.”
Citigroup, the third-largest U.S. bank, had to get a $45 billion taxpayer bailout in 2008 as mortgage losses swelled. That followed writedowns on subprime mortgages and related securities that had led to the ouster of CEO Charles O. “Chuck” Price in late 2007. The Asian unit remained profitable during the crisis, Woon said.
CEO Vikram Pandit said this week that Citigroup may return capital to owners in 2012 after earnings beat analyst estimates.
Global Logistic, which raised S$3.45 billion ($2.65 billion) and jumped 11 percent in its Oct. 18 trading debut, is the eighth-biggest IPO globally this year.
Mapletree Industrial Trust, which raised S$939 million and began trading today, ranks fifth in developed Asian markets this year. It surged 25 percent to S$1.16 from the 93-cent sale price.
Citigroup, as global coordinator with JPMorgan Chase & Co. for the Global Logistic IPO, earned 2.25 percent in underwriting fees, while it earned 1.75 percent in fees as one of the underwriters for Mapletree’s IPO.
“Banks here don’t really compete on price, so it’s really all about their relationship management with these public and private firms,” said Melvyn Teo, associate professor of finance at Singapore Management University.
Global Logistic is the overseas warehousing unit of Government of Singapore Investment Corp. and Mapletree is controlled by state investment company Temasek Holdings Pte.
“We have an extremely stable team,” Citigroup’s Woon said in an interview. “This is a team that has been together since I joined Citi” in 2004, she said. Her team has 40 members.
Woon said Citigroup’s combination of its corporate and investment banking units 18 months ago made it easier to offer customers a full range of services. The move was a global push to package products from deal advice to cash management and loans services.
For Mapletree’s Lai, it was Citigroup’s ability to integrate its processes from origination, corporate finance and execution to syndicate, sales and research that helped the bank “stand out from the competition.” He said Woon’s leadership also played a part in clinching the deal.
“She has sound judgment which you can count on,” Lai said. “It is very important for a client to be able to draw comfort from the knowledge that she can work within the bank to get things done.”
‘Let It Cook’
Woon joined Citigroup from Merrill Lynch & Co in 2004 to head its investment banking business for Singapore and Malaysia. At Merrill, where she worked for nine years, Woon advised Singapore’s United Overseas Bank Ltd. on its S$10 billion takeover of smaller rival Overseas Union Bank Ltd. in 2001.
Sanjiv Misra, who was Woon’s boss when she joined the bank, said Citigroup’s challenge was always about how to combine corporate banking products with investment banking advice. Misra, who resigned as head of Asia-Pacific corporate banking in 2008, said a more localized reporting structure in recent years sped up decisions and improved execution.
“You’ve got to put people in place and let it cook,” said Misra, who’s now managing director of Phoenix Advisers Pte, a Singapore-based advisory and investment firm he founded last year. “It’s been cooking for a while then, all of a sudden, you start seeing results.”
DBS, which is 27.5 percent owned by Temasek, tops the Singapore rankings of underwriting equity offerings with 21.1 percent of the market, rising from second place last year.
“We believe that our integrated approach to originating and distributing our deals, coupled with strong client relationship management, help to set us apart from the competition,” Kan Shik Lum, DBS’ head of equity capital markets, said in an e-mail.
JPMorgan Chase has ranked in the top three in Singapore equity deals since 2008, placing third this year, first in 2009 and second two years ago.
Property will continue to drive equity deals in Singapore this year and next, said David Douglas, Standard Chartered Plc’s global head of equity capital market.
“The real estate and REIT sectors have been very active in Singapore’s equity capital raising,” said Douglas, whose team ranks sixth this year.