Several leading Malaysian investment banks are increasingly targeting a bigger slice of the initial public offering (IPO) launches in Singapore, bringing with them not just their expertise in the housing market but more diversity in their pool of listing candidates.
AmFraser Securities is planning to introduce at least two other mainboard candidates in marine-related businesses this year, after launching Global Palm Resources, its maiden IPO in the country.
According to Mr. Tony Lim, director of AmFraser Securities, its pipeline of IPO mandates is likely to come from oil and gas, shipbuilding, offshore and marine sectors in Indonesia and Malaysia.
“This is unlike other broking houses that focus on the China market because our strength is in Malaysia and we also have operations in Indonesia,” said Mr. Lim.
Mr. Mah Kah Loon, head of corporate finance at CIMB Bank Berhad Singapore Branch, said that the bank is also expected to introduce more Singapore IPOs this year than last year.
“Certainly, we see a strong return in the number of IPOs for this year,” said Mr. Mah. “Some are from Singapore, some are from Malaysia and a couple of them from China.”
CIMB has no sectoral or geographical preference for its IPO pipeline, as it focuses on serving its clients and bringing them to markets that will offer the best value, he added.
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“If we continue to service our clients well, we will naturally capture more market share,” said Mr. Mah.
In 2009, CIMB introduced four out of the 23 IPOs in Singapore. For 2010, the bank has so far brought two IPOs to the mainboard, namely TTJ Holdings and China Hu An Cable, and a Catalist IPO – Mann Seng Metal International (MSM), a Malaysian metal engineering firm – that will start trading on Friday.
The bank, which has been an active Catalist sponsor, has a few more Catalist listings in the pipeline, said Mr. Mah.
CIMB and AmInvestment, the sole parent company of AmFraser, are the top two investment banks in their home market. Both are also actively looking for small and medium enterprises (SMEs) in China to list on Bursa Malaysia and respectively introduced the first two Chinese listings on Bursa in 2009.
They intend to expand their stockbroking business in Singapore in order to capture more trading volumes in the country.
Ms. Carol Fong, CEO of CIMB-GK Securities, said that they hoped to grow the securities arm at a 30-percent compounded annual rate in terms of retail clients, following a growth of 22 percent during the last two years.
“The market here is not over-broked but it is under-serviced,” said Ms. Fong. As such, CIMB-GK is targeting a rise in brokers from 800 to 900 by mid-2011.
Due to CIMB’s takeover of long-time stockbroking house GK Goh Securities in 2005, it has expanded its securities business in Singapore rapidly and has since climbed up the ranks to be No 5 player in the country.
For AmFraser, it is considering growing its team of about 150 dealers and remisiers to 200 in the next three years. Its growth has been more modest, since it has relied primarily on organic growth.
“We have ambitions to grow the business,” Mr. Kok Tuck Cheong said, CEO of AmInvestment Bank Group. He added that AmFraser aims to grow its annual earnings from 20 percent to 25 percent for the next three years.
So far, the three-year-old team has undertaken numerous advisory deals, including sub-underwriting the IPO of ARA Asset Management and, acting for YTL in its $202.6-million stake acquisition in Macquarie Prime REIT in 2008, among other deals.
“M&A, in particular, will be a growth area for AmFraser Corporate Finance,” said Mr. Kok. “IPOs are more visible but we do have a lot of interest shown in us whether it is from companies in Malaysia, Indonesia or other places for M&A transactions and cross-border deals.”