atans1

Posts Tagged ‘CIMB’

M’sia: Banking & politics

In Banks, Malaysia on 11/03/2013 at 2:49 pm

CIMB has a very gd CEO who made the bank a regional player bigger than DBS by managing to pick-up a controlling stake in an Indon bank during the 2007 financial crisis at a song (usually foreigners get screwed in Indonesia), and the rest is history. Everyone else is now playing catch-up including MayBank.

Sadly, if BN does not win a two-thirds majority in the coming general elections, he will out on the street. As the election result is expected to be close, CIMB executives are assuming whoever wins, he will go. He is the younger brudder of the PM, and if BN does not win a two-thirds majority, he will be defenestrated, and younger brudder will follow.

But it’s always like that in M’sia. The CEOs, and controlling shareholder (unless it is a govt agency) are always vulnerable when there is a change of PM, or when there is an unsuccessful attempt to replace a PM.

Why Najib keeps delaying elections and why Borneo makes BN nervous.

In Malaysia on 25/10/2012 at 6:50 am

Attended a seminar last week  on M’sian politics:

 — It was analysed that Najib’s lack of confidence in achieving a two-thirds majority was the reason he kept postponing the elections. If he doesn’t get a two-thirds majority, Muhaddin would replace him as UMNO leader, even if BN won again, as widely expected. UMNO kingmakers expect any UMNO leader to deliver a two-thirds majority for BN.

(Note that CIMB’s CEO is Najib’s brudder, so if he goes, CIMB will have a new boss even if the current CEO is the best man for post. I’ve blog on this before, somewhere: type CIMB in Search). To the victors, the spoils.

– Although the Opposition is likely to win a maximum of 6 seats in Sarawak (out of 31) and 8 in Sabah (out of 25), Borneo is a problem for BN because  if PR won a substantial number of seats in Malaya, and would command a majority if combined with BN’s Borneo seats, BN parties in Borneo (even UMNO Sabah) would have the excuse to switch if the terms were right. Victory for BN in Borneo was meaningless if it suffered serious reverses in Malaya.

CIMB, OCBC interested in stake in Thai bank

In Banks on 09/10/2012 at 5:32 am

OCBC and CIMB have signed non-disclosure agreements as they consider bidding for General Electric’s stake in Bank of Ayudhya, Bloomberg News reports. MayBank is interested as usual, but doing nothing, as usual. I’m surprised that OCBC is interested.  

Bank of Ayudhya is Thailand’s top or second-ranked provider of credit cards, car loans and personal finance, having bot businesses from HSBC, GE and AIG, among others.

MayBank touted as buyer of Thai bank stake

In Banks, Malaysia on 14/09/2012 at 6:43 am

General Electric is analysing options for its US$2.1 bn stake (33%) in Bank of Ayudhya. MayBank touted as possible buyer.

http://www.bloomberg.com/news/2012-09-12/ge-said-to-weigh-possible-sale-of-bank-of-ayudhya-stake.html

Buying this stake would add one more piece to the jigsaw being built after the purchase of Kim Eng (has big presence in Thai stk mkt). As usual MayBank is playing catch up to CIMB.

CIMB: Isn’t there an election coming?

In Malaysia on 05/07/2012 at 9:41 am

CIMB, Southeast Asia’s top-ranked investment bank over the past three years, is riding the crest of a wave following its acquisition of some of Royal Bank of Scotland operations in Asia.  

It played a major role in  Felda Global Ventures’ IPO which raised US$3.3 billion last month. CIMB, Maybank and Morgan Stanley were the joint bookrunners for the Felda I.P.O. while the same three plus Deutsche Bank and JPMorgan Chase were the underwriters for the retail offering.

It is the IPO manager for the Asian hospital operator IHH Healthcare which plans to go public in Malaysia and Singapore, aiming to raise as much as US $2 billion.

As the M’sian government is the ultimate controlling shareholder of Felda and IHH, this shows that CIMB’s future is tied to the political status quo in M’sia being maintained. BTW, the CEO’s elder brudder is M’sia’s PM.

The CEO of CIMB was interviewed by FT earlier this week and made no secret of his ambitions for the bank. But he doesn’t plan to make any more mega acquisitions. But he talked big. No link as interview is behind pay wall.

CIMB can now compete with rivals including Goldman Sachs, and JPMorgan Chase for Asia-Pacific deals, chief executive Nazir Razak said in an earlier interview with Bloomberg. CIMB agreed in April to buy most of Edinburgh-based RBS’s investment banking and cash equities businesses in the region for US$142 million.

The acquisition, which initially seemed to be an “audacious” idea, will complete the bank’s operations and help CIMB boost market capitalisation to more than RM100 billion (S$40 billion) by 2015, he said.That’s about 75% more than its current value. It also targets becoming one of the top three South-east Asian banks by assets and return on equity.

But the problem for him and CIMB is that if big brudder loses the coming general election (expected anytime soon), or wins only a narrow majority, the knives will be out for both of them. Fact that his wife has at times spoken out against the government (She spoke out against the government’s spin on a recent major demonstration which she had observed) will not help him.

As he is a very capable CEO, his loss will cripple CIMB’s ambitions.

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Philippines: Reasons for optimism and scepticism

In Emerging markets on 02/06/2012 at 10:41 am

(Or “Why CIMB is buying a bank in the Philippines”)

Brokers have upgraded their full-year economic growth forecast for the Philippines after the government announced a surprising 6.4% growth in the first quarter (better than other countries in the region)

Example– Nomura now expects the economy to expand by 5.1% this year from an earlier 4.6%.

“[First quarter] GDP soared to 6.4%… beating expectations. This was led by high public sector spending and still-robust private consumption …  We upgrade our 2012 GDP growth forecast to 5.1% from 4.6% as we believe these drivers will not only persist, but will also be augmented by faster increases in private investment owing to on-going reforms.”

Nomura noted that the country is also expected to improve its position in an annual competitiveness ranking, “The Philippines has fallen two spots to 43rd due to a weak ranking in the economic performance criterion, which we think is related to last year’s under spending by the government.”

As the Economist wrote a few weeks ago: Future prospects are indeed enticing: besides the unexploited mineral resources, business-process outsourcing is booming, already employing some 600,000 people. Remittances from all those Filipinos overseas have remained strong through economic crises. As costs rise in China, the Philippines is among places manufacturers eye as an alternative. Tourism has huge potential, recognised by the government’s nicely pitched campaign: “It’s more fun in the Philippines.”

The government has also started making some important reforms. In an effort to raise its revenues—at present a paltry 12% of GDP—it wants to jack up “sin” taxes on alcohol and tobacco. The bill enacting this made important progress in May when it passed a House of Representatives committee—a triumph over powerful tobacco and alcohol lobbies. It still has to pass the full House and the Senate, however.

But it remains sceptical: In fact, the Aquino administration has little concrete to show for its two years in power. The centrepiece of its programme, public-private partnerships to tackle the inadequate infrastructure which is such a hindrance to all the nation’s economic hopes, is only now stuttering to life after just one of the ten projects scheduled for approval last year saw contracts awarded. The pursuit of Mrs Arroyo and the chief justice is a distraction as well as a mission. Securing Mr Corona’s conviction might entail so many promises to senators that the point of the exercise—enhancing the government’s clean image—is lost.

http://www.economist.com/node/21555906

Well CIMB for one is bullish. In early May, CIMB  agreed to buy just under 6o% of the Philippines’ Bank of Commerce (BOC) for 12.2 billion pesos (M$881 million) in cash, a move analysts said gives it early mover advantage in a market with high-growth banking potential.

It got in into Indonesia on the cheap in 2002 before the ang mohs rediscovered Indonesia yet again. It bot into the government’s recapitalisation of a major local bank (Bank Niaga)  that was nationalised after the 1997/1998 financial crisis. 

The PBOC could be an encore.

Money for jam

In Uncategorized on 31/10/2011 at 6:10 am

I’m a shareholder in Lippo Malls Indonesia Retail Trust that has called for a massive rights issue (S$336.8m) that will not be underwritten by the five Joint Mgrs (StanChart, CIMB, Credit Suisse, BoA and UBS). Market is too volatile for them to risk their money for “peanuts”? In normal markets, they would be entitled to a fee of 2- 3% for underwriting the rights issue. This would have worked out to fees of between S$6.7m- S$10.1m.

But the five of them (StanChart, CIMB, Credit Suisse, BoA and UBS) are getting a total of S$1.5m (or 0.45% of amt to be raised) to do bugger all as I see it. This is 31.25% of the fees that will paid in relation to the rights issue. The rest of the fees will go to StanChart (financial adviser), lawyers, accountants, printers and so on.

Guess LMIR didn’t want to upset the investment banks who were planning to underwrite the issue.

DBS: What the new chairman shld be looking at

In Banks, GIC, Temasek on 24/03/2010 at 5:27 am

CIMB is regarded as having overtaken DBS in the race to become a leading bank in the region according to Ranu Dayal of  Boston Consulting, BT reported a few days ago, though DBS remains the biggest South-east Asian bank by market capitalisation.

Hey whaz this?

CIMB is from M’sia, a country that is not as meritocratic as S’pore according to the then SM and PM  in the 1990s, now MM and SM respectively. While SM cocks things up regularly (for example, in the 1990s and early noughties, when he was PM, S’pore got complacent and productivity fell), MM gets most things right.

So how come CIMB overtakes our national banking champ (err shld it be chump?). Makes me ashamed to be a S’porean. I mean the meritocratic policy is in this region “uniquely S’porean”

Wait a minute, DBS has had Foreign Talents as CEOs and senior executives since the late 1990s. Could this be the problem? The FT policy trumps the meritocratic policy.

I am surprised that anti-government subversives are not using DBS to show up the government.  Given the track record of DBS,  one could reasonably argue that the FT policy is rubbish — overpaying for Dao Heng so much so that DBS had to take an impairement charge of over S$1 billion; making its Treasured clients (they are only S’poreans, not “countrymen”) poorer (HN5 notes); and running down the expensively acquired POSB brand before realising its potential and spending $ rebuilding the brand.

And the SDP and friends can reasonably cite CapitaLand, another TLC, as an example where FTs are scarce, but where locals do well at managing a TLC. The CEO is a local and so are many senior executves. It is the leading regional property company (by reputation and market cap) and a big player in China. More than can be said of FT-laden, spastic DBS.

Of course, one could argue that there is no casual relationship between bad performance and being FT-laden,and gd performance and being local-led.  And that one FT- laden bank does taint other FT-led companies. So look at the other listed TLCs — Keppel, KepLand, SembCorp, SIA, SATS, ST Technologies, SIA Engr, SingTel, Starhub, M1 and NOL. And judge for yrself.

Back to DBS, yesterday BT had an article speculating what the incoming chairman could do for shareholders. Well he could relook the FT policy at DBS: is the policy flawed or just that the wrong FTs were recruited? Too many people from Citi, the bank that the US government had to rescue? As a HSBC shareholder and customer, I can attest to the damage that these ex-Citbankers did before they moved on.

Update on 25 March 2010

Footie fans (FTs and those who hate RI, I assume) insist I post this to show that locals can be as rubbishy as FTs.

http://atans1.wordpress.com/2010/03/25/singtel-local-talent-policy-not-working/

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