Amid volatile equity markets and an uncertain global economy,
The Goldman Sachs Group Inc.
) succeeded in attaining a hefty fee for a major equity deal as
an underwriter, Reuters reported. The stock offering is being
China Petroleum & Chemical Corp.
), better known as Sinopec Corp.
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The aforementioned equity deal worth $3.1 billion is the largest
deal to be held by a single bank in Asia, excluding Japan. With
the falling percentage of revenues in the equity capital market,
huge underwriting and brokerage fees related to the deal will act
as remuneration for Goldman.
Notably, the investment banking division of Goldman generated 64%
upsurge in revenues in fourth quarter 2012, on a year-over-year
basis. Results reflected higher revenues in equity and debt
underwriting, reflecting an augmentation in client activity.
The total fees earned by Goldman from the offering stood at
around $40 million, significantly exceeding the average fees
earned by investment bankers through similar transactions in
Asia. Goldman also received about $9.2 million from Sinopec as an
estimated underwriting fee.
Therefore, amid regulatory issues, including lawsuits and the
fundamental pressures on the banking sector, this comes as a
major achievement for Goldman.
Among others, in Dec 2012,
American International Group Inc
) conducted share sale in AIA Group Ltd. and paid about $16
million to each of the 5 bookrunners. However, the deal was more
than double the size of the Sinopec offering.
Goldman currently retains a Zacks Rank #3 (Hold). Among peers,
the companies with a Zacks Rank #1 (Strong Buy) include
Evercore Partners Inc.