The US ecomic sanctions coupled with Moody's downgrading of India rating -- in the wake of a series of nuke tests in May -- have put a brake on the Indian ECB programmes as the cost of borrowing went up.

According to the survey (carried in the July issue of the newsletter), the general election held back many deals but it was the nuclear tests which really ended the hopes of the corporate sector.

"Many had hoped that the sub-continent would take up the slack from a weakening southeast Asian market...Activity is hard to predict for the remainder of 1998 with US banks sidelined and country downgraded, deal flow will be considerably lower," it said.

Pakistan, also affected by sanctions, recorded four mandates. "Potential in the Philippines remained untapped thisquarter with only three mandates recorded, though the slowdown can be attributed to the general elections. However, there were five mandates for Korean names, suggesting a slow recovery there. Thailand had a predictably low two mandates, with Indonesia incredibly still managing to provide one," the report point out.

According to the report, the Asian loans market picked up in the second quarter of the calender year 1998 as 76 mandates were reported between April 1 and June 30, an increase of 105 per cent compared to 37 in the first quarter (January-March). However, the period was marked by continued recession. Of the 54 deals launched in April-June, only 23 closed successfully -- -43 per cent compared with 25 per cent in the first quarter -- said the survey. The remaining deals are either still in syndication or have been suspended.

According to the survey, of 76 mandates this quarter, China accounted for 17 and Taiwan 16, and half year (January-June 1998) totals for the two are 24 and 23, respectively.Hong Kong was the third most active with eight deals mandated, a marked improvement from the first quarter.

India, which was quite active in the syndicated marked in Jaunary-March, suffered a setback in the second quarter with only five mandates recorded. Power Finance Corporation raised $ 100 million from the international market this quarter. The lead arrangers of the isue were SBI International Merchant Banking group ($ 17 million), Bank of India ($ 15 million), ANZ Investment Bank ($ 10.34 million), Fuji Bank ($ 10.33 million) and Skandinaviska Enskilda Banken ($ 10.33 million).

The deals in the pipeline include IRFC ($70 million syndicated loan), Haldia Petrochemincals ($90 million). Maheshwar Hydel Project ($240 million) among others.