Citi’s 2026 Playbook for Asian Investment Banking
As 2025 draws to a close, Citi’s Investment Banking team is looking ahead to a year defined by accelerating cross-border capital flows, resilient equity markets, and a widening toolkit of financing options across Asia.
The common thread is clear – in 2026, Asia remains central to global growth strategies, with China, India, and key financial hubs such as Hong Kong anchoring deal activity amid shifting global dynamics.
One of the most notable developments is the growing flow of capital from the Gulf Cooperation Council (GCC) into China and the wider Asian region. This trend is not limited to acquisitions alone but increasingly includes structured and acquisition-related financings.
Citi expects this strategic pivot to persist, reinforcing Asia’s role as a long-term destination for Middle Eastern capital seeking scale, technology, and diversification.
Cross-Border M&A Keeps Asia in Focus
China and broader Asia continue to rank among the most important growth markets for global multinational corporations. Despite geopolitical complexity, cross-border M&A is expected to remain robust as corporates pursue expansion, supply-chain optimization, and access to innovation.
For investment banks, Asia will remain a core engine of global deal flow rather than a peripheral opportunity.
Healthcare, TMT, and AI Shape Financing Demand
Sector leadership in 2026 is expected to come from Healthcare, Technology, Media and Telecommunications, and Artificial Intelligence. These themes are driving both equity and debt financing needs.
In equity capital markets, the A-to-H share conversion trend is set to continue, while Taiwanese convertible bonds are anticipated to deliver another strong year, reflecting investor appetite for hybrid instruments linked to technology-led growth.
Sponsors Step Further Into the Spotlight
Sponsor activity is becoming increasingly important for Asian investment banking. With substantial dry powder and improving exit conditions, financial sponsors are expected to deploy capital into landmark transactions.
At the same time, Citi anticipates a rise in sell-downs as sponsors look to crystallize value, adding depth and liquidity to regional capital markets.
Convertible Bonds Regain Strategic Appeal
Convertible bonds are set to remain an attractive financing tool in 2026. Companies are leveraging favorable market conditions to secure flexible capital at comparatively attractive terms, balancing dilution concerns with lower funding costs.
This reinforces the role of convertibles as a strategic bridge between equity and debt.
Hong Kong’s ECM Revival Gains Momentum
Hong Kong’s equity capital markets recovery is expected to extend into another year of meaningful activity.
Citi anticipates strong issuance volumes and the potential arrival of one or two international names seeking listings, underlining Hong Kong’s enduring relevance as a global capital-raising hub.
India’s IPO Market – Fewer, Bigger, Stronger
India is poised for another solid year of initial public offerings, characterized by fewer deals but larger average transaction sizes.
Strong domestic demand will continue to anchor offerings, while multinational corporations are expected to further monetize their Indian operations, highlighting the maturity and depth of local capital markets.
Japan and Australia Sustain Deal Energy
After a record year, Japanese investment banking activity is expected to remain prominent in 2026.
Australia, meanwhile, continues to experience vibrant M&A momentum, reinforcing the broader strength of developed Asia-Pacific markets within the global deal landscape.
Private Credit Expands Alongside Public Markets
Private credit is set for further expansion across Asia.
While public markets will remain the primary funding channel, private credit is increasingly positioned to complement them, particularly in supporting higher-yield issuance and bespoke financing solutions.
ASEAN Poised for Positive Surprises
ASEAN markets are expected to see increased equity capital markets activity, with Citi anticipating upside surprises in both domestic and cross-border deal flow.
This reflects improving market confidence and the region’s growing relevance within global investment strategies.
A Region That Remains Indispensable
Taken together, Citi’s outlook for 2026 paints a picture of an Asian investment banking landscape that is not merely resilient but increasingly central to global finance.
From cross-border M&A to innovative financing structures, Asia’s role as a magnet for capital, growth, and strategic ambition appears firmly intact.
