RHB Seeks Higher Regional Deals Ranking With OSK: Southeast Asia

RHB Capital Bhd. (RHBC), Malaysia’s

fourth-largest lender, plans to boost its ranking for handling

mergers and acquisitions in Southeast Asia, Managing Director

Kellee Kam said in an interview.

RHB, which bought the investment banking business of OSK

Holdings Bhd. (OSK) last year, wants to be among the region’s top

eight banks for acquisitions in the next two years, according to

Kam. The company was ranked 14th in 2012 after managing $8.8

billion of deals, according to data compiled by Bloomberg.

“We need a path to eventually get up to the leaders of the

region,” Kam said in Singapore yesterday. “One of the

compelling logics of the OSK transaction was to make us more

than just Malaysia.”

RHB is expanding as bigger local rivals Malayan Banking

Bhd. and CIMB Group Holdings Bhd. (CIMB) benefit from a surge in

mergers and stock sales in Southeast Asia, a region spanning the
Philippines to Thailand. The two banks added headcount and

acquired competitors with the ambition of creating regional

investment-banking units able to compete in Asia with global

players including Goldman Sachs Group Inc. and Morgan Stanley.

The value of mergers involving companies in Southeast Asia

swelled to about $128 billion last year, close to the record

$137.1 billion reached in 2007, data compiled by Bloomberg show.

Sales of domestic bonds jumped 33 percent to a record $80

billion from the previous high of about $60 billion set in 2011.

Regional Players

“Because of the retreat of some European banks, some of

the local banks have been able to establish themselves as

regional players,” Jeremy Anderson, chairman of global

financial services at KPMG LLP, said in an interview in

Singapore yesterday.

Malaysia’s initial public offering market was the world’s

fifth-largest last year, up from 14th in 2011, according to data

compiled by Bloomberg. Almost 70 percent of the $6.8 billion

raised through IPOs came from government divestments of shares

in companies, the data showed.

Still, Malaysia’s stock market posted the smallest gain in

Southeast Asia this year, ahead of the May 5 election. The FTSE

Bursa Malaysia KLCI Index (FBMKLCI) climbed 1.7 percent, compared with

Indonesian and Philippine benchmark gauges, which gained at

least 15 percent. The ringgit rose 0.5 percent, the third-best

performer among the region’s currencies.

Stocks, Ringgit

Malaysia Prime Minister Najib Razak said earlier this month

stocks and the ringgit would plunge if he loses the election,

contrasting his government’s pursuit of stable change with the

upheaval that has engulfed the Middle East.

The economy grew at the fastest pace in 2 1/2 years in the

fourth quarter as Najib boosted spending ahead of the polls.

Gross domestic product rose 6.4 percent in the three months

through December from a year earlier, the Statistics Department

said Feb. 20, beating the median estimate of a 5.5 percent

advance in a Bloomberg News survey of 21 economists.

RHB is ranked seventh in Southeast Asia for underwriting

domestic bonds, and 18th for share sales, according to data

compiled by Bloomberg.

RHB’s acquisition of OSK’s investment bank mirrors the

purchase by Malayan Banking, or Maybank (MAY), of Singapore’s Kim Eng

Holdings Ltd. in 2011 for S$1.79 billion ($1.5 billion). That

gave Maybank stock-broking and investment banking operations in

countries including Thailand and Indonesia.

CIMB, Malaysia’s top-ranked stock underwriter over the past

four years, acquired most of Royal Bank of Scotland Group Plc (RBS)’s

securities operations in Asia in April last year. The bank said

in June that the $142 million purchase would enable it to

compete with banks such as JPMorgan Chase Co. across Asia.

For RHB, the 1.95 billion ringgit ($643 million)

acquisition of OSK’s investment bank in May last year gave it

access to investment banking operations in Southeast Asian

markets such as Indonesia, Cambodia, Thailand and Singapore.

“It will take some time before we make it to the pointy

end of the Southeast Asia league tables,” Kam said. “In MA,

it’s work in progress.”

To contact the reporter on this story:

Sanat Vallikappen in Singapore at

vallikappen@bloomberg.net

To contact the editor responsible for this story:

Chitra Somayaji at

csomayaji@bloomberg.net

RHB Seeks Higher Regional Deals Ranking With OSK: Southeast Asia