Asian credit lost its status as a global safe haven last week, as the market slumped in response to a steep drop in Chinese equities and weakening Asian currencies on a day that Chinese media dubbed “Black Monday”.
A 15% two-day plunge in Chinese shares and a surprise rate cut rattled markets last week as global investors lost confidence in mainland authorities’ ability to manage the inevitable slowdown in the world’s second-biggest economy.
Extreme swings in global equity markets took their toll on Asian IPOs last week, derailing Singapore’s first mainboard flotation of the year and complicating plans to launch at least US$5.5bn of Chinese listings.
Both investors and issuers are expressing concern over the role of bookrunners who submit early orders to support Asian bond issues.
Troubled Spanish energy company Abengoa has three banks on board for its all-important €650m rights issue, according to people with knowledge of the matter, with Credit Agricole, HSBC and Santander agreeing to a standby underwrite.