Maybank targets more IPO deals

Malayan Banking Bhd, Malaysia’s biggest lender by assets, is aiming to capture for more international initial stock sales and corporate fund-raising deals in Southeast Asia this year after spending S$1.79 billion (US$1.4 billion) to buy Singapore’s Kim Eng Holdings Ltd.

The purchase will give Maybank the platform to expand its investment banking operations outside Malaysia, Chief Executive Officer Abdul Wahid Omar said. Maybank’s overseas ventures in markets such as Singapore and Indonesia were limited to retail and commercial banking given that it was previously without permits for other services.
“There are a number of Malaysia IPOs that we have missed in the past simply because of the lack of distribution capability within the region,” Abdul Wahid said in an interview yesterday. “There are also customers in Singapore and Indonesia that we have been nurturing and when it came to the time when they want to be listed or to access the capital markets, we were not able to fulfill their requirements.”
The acquisition will also help Malayan Banking, or Maybank, close the gap in investment banking services with local rival CIMB Group Holdings Bhd, which bought stakes in Indonesia, Vietnam and Pakistan lenders in the past three years. In 2005, CIMB acquired the stock-broking business of Singapore’s G.K. Goh Holdings Ltd, giving it access to regional markets and extending its network beyond Malaysia’s 28 million population.

CIMB, which helped arrange Petronas Chemicals Group Bhd’s share sale last year, has a 32.8 per cent market share in underwriting Malaysian equity and rights offerings in 2010, according to data compiled by Bloomberg. Maybank had 10.3 per cent of the market.
Cutting Malaysian Reliance

Maybank relied on Malaysia for 82 percent of its pretax income in the year ended June, according to data compiled by Bloomberg. The Kuala Lumpur-based bank has said it’s aiming to cut the ratio to 60 per cent by 2015.
The shares have risen 2.7 per cent this year, outperforming the 0.2 per cent gain in the benchmark FTSE Bursa Malaysia KLCI Index CIMB lost 4.2 per cent.
The bank, controlled by Malaysian state-owned funds, returned to the acquisition trail this January with the offer to buy Kim Eng, a Singapore-based brokerage. The takeover would give Maybank stock-broking and investment banking operations in Singapore, Thailand, Indonesia, the Philippines and Vietnam.

The Kim Eng acquisition should be completed by the end of May, said Tengku Zafrul Tengku Abdul Aziz, chief executive officer of Maybank’s investment banking arm.

“We are definitely busier than last year,” Tengku Zafrul said in an interview yesterday. “There will be more cross- border transactions. This year we’ll have the opportunity to look at more deals with the regional platform.”

There are a few more share sales that may raise more than RM1 billion each coming to the Malaysian market this year, Tengku Zafrul said, without naming the companies. -- Bloomberg