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Karunyavanich, who spent 10 years at DBS Bank, recently expanded his role to cover the bank’s entire equity capital markets business globally as the firm merged its equities, fixed income and brokerage businesses to form a new investment banking division.
The Investment Banking division, part of DBS’s newly formed Global Financial Markets Group, has already enjoyed a stellar year, further strengthening the bank’s capital markets presence in key regions such as Singapore, Mainland China, Hong Kong, Indonesia and Thailand.
Despite a difficult period for the markets over the past two years, DBS has witnessed significant growth in its equity markets franchise. Its market share in Hong Kong has grown from just 0.2% in 2021 to an impressive 6.7% in 2023; Indonesia’s share jumped from 2% to 8.8% over the same period. Notably, DBS played a major role in two of Indonesia’s biggest IPOs last year: Amman Mineral and Trimegah Bangun Persada, which were critical to the electric vehicle battery sector.
This year, DBS acted as joint bookrunner on two of the largest ECM transactions in Singapore: the follow-on placements of Frasers Centrepoint Trust ($200 million) and Digital Core REIT ($120 million). Both offerings were significantly oversubscribed and remain the only ECM deals in Singapore year-to-date to raise more than $100 million.
Read on as we delve into Karonyavanich’s insights on navigating dynamic capital markets, DBS’s strategic initiatives and the outlook for key financial markets in Asia.
Global finance: You have been working at DBS for almost 10 years. What standout moments, successes or trends have you noticed during this time?
Art Karonyavanich: Over the past two decades, Singapore has done a great job of building the REIT market and ecosystem, becoming the largest REIT market in Asia excluding Japan. DBS was a pioneer in the early 2000s. By the time I joined the firm in 2015 and onwards, we had seen the emergence of issuers from other countries around the world looking to access the Singapore REIT market. We had a diverse group of sponsors – with assets from the US, Europe, China and Japan in segments such as data centres, logistics, offices and retail – who called the Singapore Exchange home.
girlfriend: Has the recent downturn in the Chinese property market affected DBS’s business in Singapore?
Art: Singapore was not hit as hard because the impact on properties in China was minimal. REITs in Singapore are much more diversified and backed by high quality sponsors. While there was some exposure to real estate REITs in China, most of the negative impact was contained. In fact, some REITs have done very well, including those in the logistics or data center industries, which may not have much exposure to China. Let’s hope China’s policies quickly revive the sector.
girlfriend: In what areas has DBS grown?
Art: Apart from attracting REITs and business trusts to Singapore, we have also spent time expanding our presence in regional equities. One of the markets I was hired for was Hong Kong, where many Chinese companies were listed. Over the years, we have been involved in many landmark transactions, offering clients our full range of products and supporting issuers. In 2017 and 2018, we saw China continue to open up. For a bank entrenched in onshore investment banking, equities and debt have become more important. By 2019, we began preparing to obtain a securities license in China and quickly formed a team in Shanghai. DBS Securities China was officially launched in mid-2021.
girlfriend: Was the timing of this initiative challenging?
Art: This was right in the middle of the Covid-19 pandemic. The deals we worked on to list in Hong Kong for Chinese issuers required us to have an onshore presence, so the investment and presence of our clients in China helped a lot. Having our bankers able to do deals both onshore and offshore has allowed us to be much more flexible. Starting in 2021, we were able to take on more positions, attract more clients and provide them with solutions and support. This allowed us to help them raise capital.
Southeast Asia has grown in importance over the past few years. In Indonesia, for example, we were able to double down on another key market for DBS and establish a strong capital markets presence there.
girlfriend: Global IPO and M&A activity has been dismal. How have higher interest rates impacted ECM activities in Asia?
Art: Hong Kong’s ECM volume exceeded US$100 billion in 2021. Fast forward to today, ECM volume in Hong Kong was just over $1 billion in the first quarter—a huge drop. The slowdown in emissions in Asia can be explained by many factors. One important factor is the lack of risk appetite among investors. Another big problem is interest rates. When interest rates are lower, investors allocate capital or liquidity to riskier assets. 2021 has been a good year; while 2022 and 2023 were slow, with little carryover compared to 2024. However, the past few weeks have seen a rise in the number of investors returning to buy Hong Kong-listed shares. The Hang Seng crossed the 18,000 point mark, continuing to rise. So there’s some momentum coming back in the overall market.
Later this year, we will begin to see additional capital or equity inflows from REITs in Singapore, which will help bring new equity capital back into the market. There were several deals completed earlier this year, including two REITs that raised acquisition-related capital in secondary fundraising. In the near future, when rates more or less stabilize, issuers will again begin to prepare to raise capital.
girlfriend: Where else was the peak of activity observed?
Art: There has been a big push in terms of capital deployment in India in the last 18 months or so. It catches the wave. As indices continue to rise and new issuers enter the market, a lot of money is flowing into the market.
girlfriend: Are you inspired by the results of the recent elections? (In April, Prabowo Subianto was officially confirmed as Indonesia’s president-elect; he will take office in October.)
Art: Once the election is over, we expect a number of releases to return to the market by the end of this year or early next year. We see capital markets in Indonesia developing and continuing to develop.
GF: What about Thailand?
Art: In Thailand, which is the most liquid equity market in Southeast Asia, we expect the issuance market to recover once the country’s elections are completed. These two major markets, Indonesia and Thailand, will eventually see deals resume.
girlfriend: How is DBS positioning itself for future growth and to help clients seize more opportunities?
Art: As risk appetite returns, corporations from other parts of the region, including China, will look to diversify and expand into Southeast Asia. Singapore is a natural starting point and because DBS is rooted in Singapore, it is a natural dialogue that we have with many of our clients. We will continue to look for ways to help companies raise capital here. I think this trend will continue.
Institutional demand for well-sponsored REITs with strong fundamentals will return. This demand will help support the REIT’s plans to raise equity funds to opportunistically finance the acquisition of good quality assets for which there are currently opportunities.
Ultimately, we will also see the return of follow-on issues and quality IPOs in Hong Kong, as well as growing interest in secondary listings in Singapore from companies looking to expand their operations in Southeast Asia.
Among the stock market league tables, we continue to be the leading bank in Singapore. Last year we ranked fifth in Hong Kong and second in Indonesia. We will continue to be consistent in these key markets and assist clients there as many will require equity capital as the market recovers over the next 12 to 24 months.