(IFR proceeds for Save the Children corrected in 10th paragraph)
I’M WRITING THIS column on a plane as I head back to Singapore, having attended the annual IFR Asia Awards dinner at the Four Seasons in Hong Kong. The event has become something of an institution, retaining its own quintessential flavour over the years rather like the Eurovision Song Contest or Crufts.
I saw many familiar faces from the Asian banking industry, to the point that one was tempted to ask: “Are you still doing this? Isn’t it time you moved on?” But then they were probably thinking the same of this columnist. Let’s all compare ourselves to vintage wine and leave it at that.
British comic Marcus Brigstocke was the cabaret turn and awards presenter and he did a superb job handling a multicultural audience that was initially as responsive as the legendary stony-faced crowd of the Glasgow Empire.
But he turned it around with aplomb. And as usual there was the delight of watching someone unfamiliar with the industry grappling with its arcane contents as he read out the awards categories.
Much like former Hong Kong governor Chris Patten, who presented the IFR Asia Awards (and exhibited an unlikely flair for standup comedy) nearly a decade ago, Mr Brigstocke quickly got the hang of it.
I’m not sure all the bankers who picked up awards were delighted with his rapier wit, but in this game you learn to roll with the punches and good humour prevailed.
There was the amusing sight – to me at least; maybe I should get out more – of Deutsche’s Herman van den Wall Bake and ANZ’s John Corrin returning to the stage again and again to pick up gongs awarded to deals with heavily populated syndicates, as if the video had got stuck on replay. But, of course chaps, that’s not to say it wasn’t thoroughly deserved.
THE ONE THING you can always say is thank goodness there are no acceptance speeches at the IFR Asia Awards, bar one from the Bank of the Year. Were such speeches allowed it’s difficult to know who people would thank. Not their mother or father, surely, but perhaps their favourite private bank stuffee without whom none of it would have been possible.
Citigroup’s Asia CEO Stephen Bird did the right thing in his acceptance speech for Bank of the Year: there was one good gag and the speech was short. You couldn’t ask for more.
Perhaps most importantly, money was raised for Save the Children, contributing to the more than £23m IFR’s Award ceremonies in London and Asia have raised for the charity over the past two decades.
The mood at the event was as upbeat as I can remember, having attended these awards several times myself. No one seemed fazed by the prospect of Fed rate normalisation, and most expected the issuance jamboree of the past five years to continue apace.
They are probably buying into the forward-market pricing, which has three-month US dollar Libor at 1% in a year’s time. If that anticipated rate turns out to be the right call, the market could probably live with it without going into meltdown mode.
When Lord Patten presented the IFR Asia Awards in 2007, the storm of the global financial crisis was looming, and in hindsight it may have seemed just plain wrong to be celebrating the world of investment banking and its achievements. But the show went on – as I’m sure it will for the foreseeable future.
Those familiar faces I mentioned weathered that storm and last week’s awards proved that the people who survive in the industry through the years must be doing something right. They are the ones who pick up the prizes, one-off flukes notwithstanding.
There are some phenomena in Asia which might give even a dyed-in-the-wool optimist pause for thought
STILL, I COULDN’T help wondering whether the optimism – I must avoid calling it smugness – which was washing around the ballroom of the Four Seasons was misplaced.
There are some phenomena in Asia which might give even a dyed-in-the-wool optimist pause for thought. One is the outlook for Asian currencies.
Competitive currency devaluation is playing out, and you have to wonder how that places the renminbi given that China’s economy remains fundamentally export-driven.
If China must necessarily join in the Asian currency devaluation game to remain competitive in global export markets, then there is a big question mark hanging over the mountain of offshore debt the country’s enterprises have accumulated.
China real estate developer Kaisa’s recent coupon scare might just prove to be the tip of an iceberg that will stymie offshore China issuance for all but the highest-quality names.
Meanwhile there is the fear that as the US approaches full employment the Fed’s low interest rate policy places it way behind the curve. Low oil prices are a luxury for Fed governor Janet Yellen’s decision-making on rates, but numerous analysts reckon oil will rebound.
San Francisco Fed chief John Williams thinks Ms Yellen should act now to avoid having to push rates up drastically later if inflationary pressure has been underestimated and prices start rising. If the forward market is wrong and the Libor rate is nearer 2.5%, then you would have to worry about Asia and its over-leveraged households.
A severe interest rate-driven recession in Asia would wreak havoc on debt servicing and drastically crimp new issuance from the region.
IFR Asia’s master of ceremonies certainly got everyone laughing at the awards dinner last Wednesday. Let’s hope that reflects the underlying reality, rather than the stony faces which prevailed at the start. In time we will know.
