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33rd MIBA Annual Dinner

Event Start Date 10th Nov, 2012 Venue ISTANA HOTEL KUALA LUMPUR

Welcome Remarks By Ybhg Tan Sri Azman Hashim
Chairman, Malaysian Investment Banking Association
at The 33rd Malaysian Investment Banking Association Annual Dinner
at The Grand Mahkota Ballroom,
Istana Hotel Kuala Lumpur
Saturday, 10th November 2012

Bismillahirrahmanirrahim

YB Datuk Ranjit Ajit Singh,
Chairman of Securities Commission
& YB Datin Munwant Kaur

YB Dato’ Sri Abdul Wahid Omar,
Chairman of Association of Banks in Malaysia & President/CEO of Maybank
& Datin Sri Kay Roserina

On behalf of the Malaysian Investment Banking Association (MIBA), it gives me great pleasure to welcome our distinguished guests from Bank Negara Malaysia, the Securities Commission, Bursa Malaysia Berhad, Government Ministries and agencies, financial institutions, associations and investment institutions.

I am also pleased to extend our warm welcome to all members of MIBA and wish to thank everyone for their invaluable support, contribution and participation in making the Games and this Annual Dinner a success.

Tonight, we are celebrating our 33rd Annual Dinner in conjunction with the conclusion of MIBA Games 2012. The MIBA Games is an annual affair held to promote friendly competition, sportsmanship and fellowship among members of the investment banks in Malaysia.

As Chairman of MIBA, I would like to thank all the members who have participated and contributed to the success of this year’s Games. Let me also extend my congratulations to all winners, particularly AmInvestment Bank for emerging as Overall Champion, CIMB Investment Bank as the first runner-up and RHB Investment Bank as the second runner-up.

I am especially delighted to note that member investment banks have again agreed to perform at tonight's Annual Dinner. The participating banks will be competing in a talent showcase.

I commend the members for making the effort to put on a show for us tonight. I am sure they have all put in a lot of time for practices, rehearsals, etc. I felt that last year’s performances were of high standard, professional with attractive costumes and dance routines and the show was most enjoyable. We are awarding attractive prizes for the performances – RM6,000 for the Champion, RM5,000 First Runner Up, RM4,000 Second Runner Up and a Consolation Prize of RM3,000 each. Of course, the theme tonight is Colours of “ASEAN” – perhaps for next year - K-Pop or Gangnam Style or even Malaysia or MIBA style.

Ladies and Gentlemen,

It has been half a decade into the global financial crisis, the world economy continues to be challenged and is showing no signs of an early recovery. In this environment affected by ongoing economic challenges and uncertainties originating from Europe and the United States, Asia has become an important source of stability. While the region is somewhat affected, it continues to remain on a growth trajectory, although at a more modest level.

Malaysia surprisingly has done rather well. Our economy has been resilient, growing by 5.4% in the second quarter, which can be attributed to the timely implementation of various innovative transformation programmes introduced by the Government. The initiatives have in part cushioned the domestic economy from the effects of a weaker external sector.

Despite the external uncertainties and increased competition from emerging countries for foreign investment, Malaysia attracted net inflows of foreign direct investment (FDI) worth RM13.6 billion during the first half of 2012, reflecting investor confidence in Malaysia as a major investment destination.

The strong domestic economic environment also boosted the positive performance of the stock market which continued to remain resilient and record gains. The Financial Times Stock Exchange Bursa Malaysia Kuala Lumpur Composite Index (FBM KLCI) registered a new high of 1,675.69 points on 1 November 2012.

2012 has been a strong year for the Malaysian capital market. The size of our capital market increased by 14% from RM2.1 trillion last year to RM2.4 trillion as of 30 September 2012.

Our booming initial public offering market has been the talk of Asia's bankers this year. The string of Malaysian listings has been very impressive. History was created when two out of the three largest global IPOs were raised domestically, namely Felda Global Ventures Holdings Berhad, Asia’s biggest IPO and the world’s second biggest behind Facebook, and IHH Healthcare Berhad. Astro Malaysia Holdings Berhad, the latest to debut on Bursa Malaysia was Malaysia’s third largest and sixth largest globally.

These listings pushed the volume of IPOs from Malaysian companies to US$7.3 billion (RM22.3 billion), accounting for nearly one-quarter of all new listings in the Asia-Pacific, beating the all-time annual record of US$6.9 billion (RM21.07 billion) set in 2010. The mega IPOs this year have not only placed Malaysia firmly on the radar of global investors but is a testament of the depth of our domestic market liquidity.

According to Thomson Reuters Investment Banking Scorecard, Bursa Malaysia is now ranked fourth globally behind Nasdaq, the New York Stock Exchange and Tokyo First Section, by proceeds raised. This is also the first time in decades that Malaysia has surpassed Hong Kong and Singapore as the choice destination for IPOs.

Our market capitalisation has increased by 21% to RM1.42 trillion on 30 September 2012 and the total number of companies listed on Bursa stood at 925 as at 5 November 2012.

The Malaysian bond market also achieved a record year in bond issuances, with funds raised totaling RM100 billion as of 30 September 2012, surpassing 2011's total issuances of RM70 billion. The overall bond market stood close to RM1 trillion today, compared to RM841 billion last year, to become the third largest local currency bond market in Asia.

Malaysia certainly has all the credentials to play a significant lead role in the development of the Asian bond market. Currently, cross-border issuances are still largely denominated in Ringgit. However, with the increasing number of foreign issuers and international investors, there is an opportunity for us to promote more issuance of multi-currency bonds in Malaysia. The infrastructure of our bond market is able to support these activities.

The Government’s directed efforts in supporting and providing a stable environment to promote growth, while avoiding financial imbalances through effective regulatory framework have enhanced the robustness and resilience of our market. It has also improved foreign investors’ perception of Malaysia as an attractive investment destination.

In a recent HSBC Expat Explorer Survey Malaysia was the top destination for career-driven expatriates and a great quality of life. In the 2013 edition of the World Bank’s “Doing Business Report” when it comes to investor protection, Malaysia ranks at 4th place. The Report places us amongst the top ten reformers in the APEC grouping with regard to regulatory practices. Malaysia also shares 4th place with Japan in the Asian Corporate Governance Association's ‘Corporate Governance Watch 2012 Report’, up two positions from 2010.

In addition, compared to 2011, Malaysia’s global competitiveness ranking improved two notches from the 16th to 14th position, ahead of China, Japan and the Republic of Korea as reported in the 2012 World Competitiveness Yearbook by the Institute for Management Development. In the Foreign Direct Investment Confidence Index released by the global management consulting firm AT Kearney, Malaysia also improved its ranking from 21st to 10th position.

Such recognition in international rankings will continue to build investors’ confidence and attract capital to our market.

Ladies and Gentlemen,

It has been a defining period for Islamic finance which has continued to demonstrate its viability in this financial environment. The Islamic capital market has contributed significantly to the development of the overall capital market in Malaysia and remains an important alternative source for raising capital.

Our sukuk market had a thriving start this year when PLUS Berhad issued the world’s largest sukuk of RM30.6 billion in January 2012.

We continue to be at the forefront in the innovation and development of sukuk and remain global leader in the sukuk industry, accounting for 71% of total global sukuk outstanding as at end-July 2012. The Malaysian sukuk market has also evolved into a multi-currency denominated sukuk market with pioneering sukuk issuances in US dollars, Singapore dollar and the Renminbi. The recent issuance of Renminbi sukuk by Malaysian corporate which attracted wide international participation is another demonstration of our attractiveness as well as capability in structuring and distributing global mandates.

Continuous efforts have been taken to further position Malaysia as the leader in Islamic finance as Islamic finance continued to gain significant importance in the global financial market. These included a recent review of laws relating to land, hire purchase and contract by the Law Harmonisation Committee in order to facilitate Islamic finance transactions.

Following the first Capital Market Masterplan, which was from 2000 - 2010, the size of our Islamic capital market has achieved remarkable growth and more than tripled in value to RM1.05 trillion. Shariah-compliant securities listed on Bursa Malaysia had a market capitalisation of RM883.8 billion as at 30 September 2012, representing 64% of the total market capitalisation. Meanwhile, Bursa remains the top sukuk listing destination, with 19 sukuk listed totaling RM99.6 billion.

Ladies and Gentlemen,

Increased capital raising activities have enabled us to undertake many landmark projects and spur economic activities resulting in Malaysia having one of the most comprehensive capital market infrastructures in the region. These would not have been possible without the introduction of some vital measures and regulatory enhancements which had stimulated the industry's growth.

In order for capital formation to be made more inclusive, the SC launched a retail bonds and sukuk framework on 7 September 2012 which provides retail investors direct access to invest in bonds and sukuk. The launch was in line with the initiative under the Capital Market Masterplan 2 (CMP2) to facilitate greater retail participation in the bond and sukuk market to further improve market liquidity. Guidelines and regulations are expected to be announced in the first quarter of 2013.

Initiatives announced at the Invest Malaysia 2012 include the establishment of a Capital Market Task Force to make recommendations and identify implementation programmes to streamline regulatory and management processes, which is part of the overall strategies towards creating a capital market that is internationally competitive, fair and efficient.

On the regional level, continued efforts were made to further advance financial sector integration in the region. The ASEAN Capital Markets Forum (ACMF), comprising capital market regulators from the 10 ASEAN jurisdictions, has been working on the development and integration of ASEAN capital markets. Among some of the key initiatives is the harmonization of disclosure standards to facilitate multi-jurisdictional offerings of equity and debt securities.

Under the aegis of the ACMF, the regulators of Malaysia, Singapore and Thailand signed a Memorandum of Understanding on the Expedited Review Framework for Secondary Listings on 16 March 2012 to speed up the processing of secondary listing applications which will foster greater capital market integration in the region and promote ASEAN as a global fund raising destination.

On 18 September 2012, Bursa Malaysia together with Singapore Exchange were the two pioneering exchanges to launch the ASEAN Trading Link, followed by the Stock Exchange of Thailand on 15 October 2012.

In addition, the ASEAN+3 Finance Ministers and Central Bank Governors’ Meeting in May agreed to enhance the Asian Bond Markets Initiative (ABMI) and continue to build on existing initiatives. To facilitate cross-border bond transactions in the region, the establishment of a new international credit rating agency is also being discussed.

ASEAN member states continue to achieve significant progress in delivering the commitments made to deepen market integration as part of the ASEAN Finance Ministers’ agenda and pledge to realize the goals of the ASEAN Economic Community by 2015. As such, we too will need to prepare ourselves to capitalise on the regional opportunities arising from these commitments as it will set the stage for greater cross-border flows of capital and services within the region.

Asia is emerging as an increasingly important component of the world economy. Despite the challenging environment, trade among the expanding emerging economies now account for 63% or US$37 trillion of world trade, an increase of 17% from a decade ago.

The integration process and measures undertaken to strengthen regional financial cooperation and collaboration will not only sustain the financial stability in the region, but will also promote more efficient intermediation of funds in Asia to support the region’s growth prospects.

Ladies and Gentlemen,

To advance forward into the new financial landscape, human capital development is pivotal. This new direction not only raises serious organisational challenges but also one of leadership, particularly as banks become larger and more complex, with increasingly diverse geographical and product markets. This will require world-class business talent, with critical strategic and leadership capabilities to build institutions that are dynamic and resilient in the face of a more challenging global environment.

In order to bring talent development to the next level, greater collaboration between the financial industry and education service providers will be important in supporting the talent requirements of the industry. New talent development strategies and approach to training are needed to ensure continued relevance within a broader context. Having the required talent will be vital in managing the challenges confronting the financial sector moving forward.

The outlook for Malaysia's economic prospects remain positive despite the uncertainties in the global environment. Vibrancy in domestic investment, particularly with the implementation of projects under the ongoing transformation initiatives will support the strong growth of the economy which is expected to expand between 4.5% and 5.5% in 2013.

The Government remains committed to providing an enabling environment for the private sector to take the lead in generating economic activities. The financial sector will continue to be the enabler and catalyst of growth, as the CMP2 will expand the role of the capital market in financing economic activities.

We, as investment banks must strive to ensure that our capital market continues to remain relevant, dynamic and efficient. The stability, strength and credibility of our capital market provide many opportunities for growth.

However, in our drive to enhance our position and competitiveness, we must also continue to promote the fundamental values of accountability and responsibility that are expected of investment banks from our various stakeholders and the marketplace at large.

Ladies and Gentlemen,

Finally, we would like to again express our commitment and support for the Government in whatever manner to ensure that our economy will continue to grow and develop over the next year and beyond.

MIBA is continually taking pro-active steps to upgrade capabilities of the investment banking participants through continued education and training. The Association has been and will continue to remain active in organizing various developmental and training programmes to keep members informed of current market developments and to enhance knowledge, skills and competency of investment bankers.

MIBA is grateful to the Government and its agencies for their continuous support and assistance. In this regard, let me extend our thanks and appreciation to all the officials of Ministry of Finance, Bank Negara Malaysia, Securities Commission, Bursa Malaysia, Ministry of International Trade and Industry and other relevant regulatory authorities. We have benefited greatly from the frequent dialogues, exchange of views and proposals and we look forward to more of such interactions in the coming year.

Once again, I would like to thank all our guests and members of the Association for taking time out to attend our Annual Dinner tonight.

Let me also extend my appreciation to the Secretariat of MIBA for coordinating the MIBA Games 2012 and for organizing tonight’s event. I would like to thank the Senior Management, Sports Presidents and Team Managers of all MIBA Members for their cooperation and contribution in ensuring the success of the Games and tonight’s Dinner.

To everyone present tonight, I wish you all the best and hope you will have an enjoyable evening.

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