UBS AG (UBS) recorded the highest investment banking revenue from China in 2006 with an 11.1% share of the total, while Citigroup Inc. (C) led investment bank revenue in India with a 10.6% share.
During 2006, revenue generated from Chinese investment banking rose 67% to US$1.3 billion from US$792 million in 2005. During the year, Industrial & Commercial Bank of China Ltd.’s (1398.HK) US$21.9 billion initial public offering became the largest equity capital markets offering on record globally, beating former record-holder Japan’s NTT Mobile Communications Network’s US$18.38 billion IPO in 1998.
Chinese M&A volumes hit US$100.6 billion in 2006, up 63% from 2005’s US$61.8 billion.
The biggest Chinese M&A deal in 2006 was the US$4.47 billion acquisition of 32.2% of China Southern Power Grid Co. by China Life Insurance (Group) Co., the parent company of China’s biggest life insurer by premiums. That deal is still awaiting regulatory approval.
The acquisition by a number of parties, including China Life and Hong Kong blue-chip developer Cheung Kong (Holdings) Ltd., of a 3.3% stake in ICBC for US$4.31 billion ahead of the bank’s IPO was the country’s second-biggest M&A transaction this year.

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ICICI Venture, the biggest Indian buyout firm, plans to scale up the size of investments to earn bigger returns as company valuations surge and competition intensifies.

The firm, which has raised $2 billion, may buy stakes as large as $125 million, five times the average size of existing investments, Renuka Ramnath, managing director of ICICI Venture, said in an interview in Mumbai. That would include about $50 million from co-investors, she said.

Buyout firms including ICICI Venture, Blackstone Group and Carlyle Group are competing with banks, securities markets, hedge funds and other investment sources to fund Indian companies as accelerating economic growth pushes up stock valuations. The economy is on course to expand more than 8 percent for a fourth year.

"It has pushed up valuations, it has pushed up expectations," said Ramnath. "All my potential clients have five distinctive ways of solving the same problem; private equity is only one of them."

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In the wake of intense competition in the domestic and international financial players, India`s largest bank, State Bank of India (Q, N,C,F)* (SBI) has begun firming up 15 new business initiatives with substantial profit potential, reports Financial Express.

SBI, has formed a new department to be headed by a deputy managing director to draw up a blueprint for these cutting-edge segments in financial sector services.

Private equity, point of sale, cards business (gift cards, payroll cards & other cards,) pension, general insurance, merchant acquisitions and gold banking are a few areas SBI is looking at for developing its profile as a modern 21st century bank.

Om Prakash Bhatt, chairman, SBI, said that earlier, there were so many businesses which SBI never ventured into because there was no ownership of these ideas within the bank and the bank was not structured to deal with them. But it is now ready to do it now on a grand scale.

With the new initiative, SBI is determined to capture its lost market share which it has been losing for the past five to ten years.

Shares of SBI closed at Rs 1214.05, up by Rs 2.85 or 0.24% at the BSE. The total volume of shares traded was 311,921.

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Private equity firms, already reshaping wide swathes of American business, are poised to begin shaking up the venture industry, too.

In a new survey of venture capitalists’ 2007 predictions, 71 percent of the 200 individuals polled by the National Venture Capital Association said that selling their startups to these giant buyout firms may become an “attractive option” next year.

It’s a dramatic shift; the worlds of venture capital and private equity have rarely interacted.

Private-equity firms typically buy mid-size to large companies — public or private — with an eye toward selling for at least twice their intial investment within a few years, while VCs mostly invest in nascent, unproven companies, hoping for bigger payoffs on smaller investments.

But venture investors have been overshadowed by ever-ballooning private equity firms and believe it’s inevitable that some of the capital sloshing around the buyout world will find its way to them.

According to Dealogic, a New York-based outfit that tracks M&A activity, private equity firms have so far this year spent $376 billion to purchase 766 firms in the United States, the vast majority of which have been privately owned companies. The figure is roughly three times the $129.6 billion that private equity firms shelled out last year to acquire 721 companies.

“For firms like mine, it’s great,” said Charlie Rothstein, a venture capitalist with the investment firm Beringea, which has offices in Detroit, London and Los Angeles. “My options used to be to sell to the trade,” meaning to acquisitive companies like a Google or Computer Associates, “or to try and take a company public.”

IPOs had long been the preferred way to “exit” venture investments, but VCs say that taking a company public has become more difficult, largely owing to tougher SEC regulations.

“Now, with this massive population of buyout funds scratching around for any deals they can find, we’re all going to start benefiting,” said Rothstein.

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Finance Minister P Chidambaram on Wednesday said wasteful expenditure must be cut to promote investment in infrastructure sector.

"If we are able to compress fiscal deficit, we will create space for investment in infrastructure sector," he told reporters on the sidelines of a CII workshop.

The space has been previously "encroached by inefficient, outdated, rent-seeking and wasteful programmes" financed through fiscal deficit, he said.

There was no room for wasteful and high-sounding programmes through public funding, he said while expressing his commitment to meet fiscal deficit targets.

"We must resist temptation to follow the route of fiscal deficit for funding projects. However, we will not follow the example countries like Australia and New Zealand which have opted for zero per cent fiscal deficit," he said, adding the government would allow fiscal deficit up to three per cent of GDP to meet investment targets.

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In the aftermath of last week’s visit to Japan by Prime Minister Manmohan Singh, more Japanese banks and companies are showing interest in India even as the two countries consider setting up a special fund to finance joint projects.

The Confederation of Indian Industry (CII) has suggested the creation of an Indo-Japanese Dedicated Fund to be supported by both countries, which can finance joint projects, CII president R. Seshasayee told reporters here Monday.

‘The response of the prime minister to the CII’s proposal was very positive,’ he stressed. Seshasayee led a delegation of India’s top business leaders to Japan that coincided with Manmohan Singh’s four-day visit to Tokyo.

The CII also plans to submit a paper to the government that will identify sector-wise opportunities and roadblocks to spur investment and double bilateral trade to $15 billion, he underlined.

‘Japanese banks, which have solidly supported industry inside Japan and foreign investment outside, are now keen to come to India,’ Seshasayee said. He, however, did not mention any specific Japanese bank that is eyeing the Indian market.

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