* Macquarie among banks that may arrange AIA IPO-sources
* Macquarie IPO share gains comes after a 5-year build-out (For more Reuters' Dealtalks, click [DEALTALK/]
By Michael Flaherty
HONG KONG, June 2 (Reuters) - Wall Street and European banks have long sat atop the rankings for arranging initial public offerings across Asia.
So it comes as a surprise to some that Australia's Macquarie Group (MQG.AX), which until last year was all-but-invisible in the Asian market for new issues, is involved in a spate of new listings in Hong Kong.
In addition to arranging several IPOs of Chinese companies, sources say Macquarie is among the banks being considered to handle the listing of AIA, the Asian life insurance group of AIG (AIG.N) that is seeking to raise around $4 billion. Macquarie and AIA declined to comment on the matter.
Macquarie's quick rise from virtually nowhere in the Asia IPO scene could be attributed by rivals to a few lucky breaks in a previously dead market that's just coming back to life.
But analysts, people close to the bank and even some rivals say Macquarie's market share grab isn't a fluke. The bank began its equity capital markets build-out in 2004 through a deal with Dutch financial group ING ING.AS.
It has since aggressively expanded the ECM business, hiring several hundred people, building an international distribution network critical to syndicating equity offerings and establishing a large fleet of research analysts.
"For Macquarie, it has been a market share gain story in Asia and the momentum is assisted by leveraging the previous acquisition of the ING cash equities business," said Credit Suisse CSGN.VX analyst James Ellis, who rates the stock an outperform.
Australia's largest investment bank went from 26th place to 3rd place in the Thomson Reuters 2008 Asia IPO standings, which excludes deals in China's domestic A-shares, Japan and Australia.
Deutsche Bank DGKGn.DE took the top spot from UBS UBSN.VX, which slipped to fourth, while Morgan Stanley (MS.N) fell to 6th place from 2nd and Merrill Lynch -- now owned by Bank of America (BAC.N) -- went from 5th to 7th.
Granted, Macquarie's success should be taken into perspective. Hong Kong IPO issuance dried up last year and is down 72 percent year to date, Thomson Reuters data shows. And Macquarie's 2008 league table ranking was due mainly to one big deal: China Railway Construction's (601186.SS) $5.8 billion IPO.
In terms of overall Asia equity issuance, the Australian bank still doesn't match up to Western rivals such as UBS and Goldman Sachs (GS.N).
But it's making headway. While rivals retreat, Macquarie has built a huge research team in Asia, covering around 1,000 stocks. Big research teams help entice corporate clients seeking a listing and subsequent attention from analysts and their institutional clients.
Macquarie has 50 sales people around the world dedicated to selling only Asia Pacific stocks, according to a person close to the bank who was not authorised to discuss the size of the group.
"They have one of the biggest teams across Asia Pacific in terms of research," said an Australia-based analyst who covers the company and did not want to be named.
A roughly 67 percent surge in the Hang Seng Index .HSI since a March trough has prompted a string of companies to consider IPOs or revive listings that were put on hold last year.
And so far, several of the offers have included Macquarie, known more for its infrastructure expertise and numerous investment funds than its IPO platform.
Macquarie is a bookrunner for Chinese chemicals maker Lumena Resources Corp, which began marketing a Hong Kong IPO on Monday to raise up to $190 million. The bank has been hired for the Hong Kong listing planned by Canada-listed mining group SouthGobi Energy Resources SGQ.V, a source told Reuters on Monday.
BBMG Corp, one of China's top construction materials makers, has a $500-$700 million Hong Kong IPO in the works, and Macquarie is among the banks handling that one too, sources have said.
China's Real Gold Mining (0246.HK) debuted on the Hong Kong exchange in February, with Macquarie among its backers.
While Macquarie has been less affected by financial turmoil compared to other banks, it's by no means in the clear.
This month it raised $400 million in new shares as it sought to strengthen its balance sheet after booking larger-than-expected writedowns. Despite that pressure, it's continuing to make its equity push across Asia.
"I'd be cautious to say they're doing a phenomenal job," said a Hong Kong-based equity capital markets banker who did not want to be identified. "But obviously they have good client relationships." (Additional reporting by Denny Thomas in Sydney; Editing by Lincoln Feast)