Welcome Remarks By Ybhg Tan Sri Azman Hashim
Chairman, Malaysian Investment Banking Association
at The 34th Malaysian Investment Banking Association
Annual Dinner At The Taming Sari Grand Ballroom,
The Royale Chulan Kuala Lumpur
Saturday, 9 November 2013
YBhg Dato’ Muhammad Ibrahim,
Deputy Governor, Bank Negara Malaysia
Encik Nik Azman Abdul Majid,
Deputy Director – General (Dasar), Economic Planning Unit
and Puan Wan Hafidah Wan Hanafi
Mr Goh Ching Yin,
Executive Director, Strategy & Development,
YBhg Dato’ Azman Mahmud,
Deputy Director General I,
Malaysian Industrial Development Authority (MIDA)
and Datin Jamnah Idrus
Mr Chong Kim Seng,
Chief Executive Officer, Bursa Malaysia Derivatives
Council Members of MIBA,
Ladies and Gentlemen,
On behalf of the Malaysian Investment Banking Association (MIBA), let me extend our warm welcome to our Guest-of-Honour, YBhg Dato' Muhammad Ibrahim, Deputy Governor Bank Negara Malaysia, to tonight's Annual Dinner.
I am also pleased to welcome our distinguished guests from the various Government ministries and agencies, Bank Negara Malaysia (BNM), the Securities Commission (SC), Bursa Malaysia, financial institutions, associations and investment institutions.
I would also like to welcome all members of MIBA and wish to thank everyone for their invaluable support and contribution not only in making the Games and this annual gathering a success but also in supporting all other activities of MIBA.
This evening, we are celebrating our 34th Annual Dinner in conjunction with the conclusion of MIBA Games 2013. I have been the Chairman of MIBA for 31 years! I am happy that we have achieved another successful year of friendly competition, sportsmanship, goodwill and fellowship among members of the investment banks.
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 congratulate all winners, especially AmInvestment Bank for emerging as Overall Champion, CIMB Investment Bank as the first runner-up and RHB Investment Bank as the second runner-up.
Ladies and Gentlemen,
Last year was an outstanding year for our capital markets despite the challenging economic conditions. The significant amount of funds raised in 2012 has positioned Malaysia as the fifth largest initial public offering (IPO) destination globally and third largest bond market in Asia, with the overall size of the capital market reaching RM2.5 trillion.
Since the Asian financial crisis, Malaysia’s foundations have improved greatly with a better and sound financial system. There is ample amount of liquidity, our international reserves remained high at RM444.9 billion as at 14 October 2013 and fundamentally, the domestic financial system remained resilient, with well-capitalized financial institutions that continued to support expansion of economic activities in line with our long term growth prospects.
The banking system stayed strong even with the recently implemented and more stringent Basel III capital adequacy framework. Capital in excess of the minimum regulatory requirement, remained high at more than RM73 billion with banks maintaining strong liquidity buffers.
The stock market also continued its positive momentum in line with the favourable trend in the regional markets with the Financial Times Stock Exchange Bursa Malaysia Kuala Lumpur Composite Index (FBM KLCI) reaching 1,810 points on 1 November 2013.
After a year marked with new highs and record equity listings in 2012, net funds raised in the capital market in the first eight months of this year has slightly weakened amounting to RM40.5 billion (2012: RM90.6 billion). IPOs moderated to RM3.3 billion although right issuances were higher at RM5.1 billion (2012: RM17.5 billion and RM2.7 billion respectively). However, discounting the one-off issuances related to the Economic Transformation Programme and Government initiatives last year, these figures are healthy by historical standards.
The capital market remains an important source of financing for businesses. Currently, Malaysia's bond market is the largest in Southeast Asia with an outstanding value exceeding RM1 trillion and our market capitalization has also increased to RM1.6 trillion. There were 12 new listings on the Main Market as at 1 November 2013 and the total number of companies listed in Bursa Malaysia to-date stood at 912.
Ladies and Gentlemen,
Malaysia continues to be a global hub for Islamic finance. With high liquidity in the sukuk market, we saw growing interest from foreign issuers to tap into our sukuk market resulting in greater internationalization through wider participation of foreign sukuk issuers.
Early this year, a USD1.5 billion equivalent Multi-currency Sukuk Issuance programme, the first of its kind, was given approval to be carried out under the Shariah principle of Ijarah. Not only did it receive international rating which was higher or at par with Malaysia’s sovereign rating, it also enabled a wider pool of investors to be tapped.
In July, the sukuk market saw a significant development with the inaugural issuance of Government Investment Issues at a value of RM4 billion which was oversubscribed by 2.9 times.
At present, the size of our Islamic capital market has increased to RM1.4 trillion with Malaysia maintaining its position as the leading sukuk market, capturing 70% of global sukuk outstanding. Bursa Malaysia continued to be ranked as the top exchange for sukuk listing with 799 Shariah-compliant securities listed amounting to USD32.3 billion.
In line with initiatives to strengthen the structure of the capital market industry and position Malaysia as a destination for investment and fund raising, a wide range of measures and regulatory reforms were introduced this year.
To provide greater retail participation in the bond and sukuk market, the SC has revised the Guidelines on Private Debt Securities and Sukuk in January 2013 to allow public listed companies and banks to offer bonds and sukuk to retail investors. Bonds and sukuk are for the first time offered to retail investors with DanaInfra National Berhad's debut issuance of the first retail sukuk of RM300 million through Bursa Malaysia on 8 January 2013.
In March, Bursa Malaysia launched eRights to facilitate electronic subscription and payment when subscribing for rights issues. Bursa also amended its rules to facilitate listing of business trusts on the Main Market.
Further strengthening the financial sector regulatory framework, the Financial Services Act 2013 and the Islamic Financial Services Act 2013 came into force on 30 June. The FSA and IFSA consolidated and replaced several separate laws to govern the financial sector under a single legislative framework for the conventional and the Islamic sector respectively.
To ensure efficient operations of financial markets, the Prime Minister had in the 2013 Budget announced that BNM will lead the initiative in formulating the Netting Act to reduce credit risks and promote the derivatives market, thereby reducing systemic risks in the domestic financial market as well as reduce the cost of doing business.
In this regard, MIBA would like to specifically thank the Government, BNM and SC for considering our request, being accommodative and committed to ensuring the development and competitiveness of the Malaysian capital markets.
Ladies and Gentlemen,
Regional integration has become a national agenda for Malaysia and we remain committed to realizing the goals of the AEC as it will support the National Transformation Programme to elevate Malaysia’s status to become a high-income nation. As at July 2013, Malaysia has successfully implemented over 88.2% of the AEC Blueprint measures while ASEAN has implemented 79.5% of the measures. The full implementation of the AEC Blueprint is significant to Malaysia being the chair of the ASEAN Summit in 2015.
Ladies and Gentlemen,
The success of businesses greatly depends on having highly skilled and talented workforce. Human capital has become a key driver and enabler to support industry development. However, the challenge for recruiting and retaining talent, particularly in the investment banking sector has become more critical.
To support the growth of the capital market, the SC in collaboration with industry players, recently launched the Graduate Representative Programme 1000 on 27 August 2013 to develop skilled and knowledgeable young professionals for the industry.
The financial landscape has been through tremendous changes and is still continuously evolving. Globalization and advancement in technology are increasing connectivity between financial markets across borders, creating a more complex and sophisticated financial system.
Technology and innovation have become important elements in shaping business performance, increasing productivity, transforming capabilities into results and most importantly, to remain competitive.
Therefore, to make Malaysia's competitive edge even sharper, we as investment banks need to keep up with changing times. It is important that we embrace and leverage on new technology, foster creativity and ensure innovation to help create new offerings, penetrate global markets and seize new opportunities that emerge while sustaining growth.
In tandem with better prospects of global growth, our economy is expected to grow at around 5% in 2014. The positive factors and the ongoing implementation of ETP projects that supported domestic demand this year will continue to contribute in 2014. The Financial Sector Blueprint (2011-2020) and the Capital Market Masterplan 2 (2011 – 2010) are also expected to continue to drive the development of the financial sector.
As Malaysia gears towards the next phase of growth into a high income nation, the financial sector will play a key role in facilitating the transformation. We are committed to keep raising the bar and continue to strengthen our role as investment banks to support the process, taking our economy to a new level, while preserving the strong foundations that have been built so as to remain resilient.
Finally, in our drive to create vibrancy, enhance competitiveness and establishing our presence, we must also continue to promote the values of accountability and responsibility that are expected of investment banks from our various stakeholders.
Ladies and Gentlemen,
On the part of the investment banking sector, we would like to 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. MIBA has been and will continue to remain active in organizing various 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.
Ladies and Gentlemen,
I am very much looking forward to tonight's entertainment. This will be the fourth year that member banks are putting up performances and competing in a talent showcase. The theme for tonight’s talent competition is ‘Rock of Ages’ which will be most enjoyable. I commend the members for taking time out to participate and making the effort to put on a show for us tonight. Performance by groups from our Member Institutions has always been of a high standard – in terms of high performance, choreography, costumes, etc. We all should look forward to this and give everyone our full support.
Once again, I would like to thank YBhg Dato' Muhammad Ibrahim and all our guests and members of MIBA 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 2013 and for organizing tonight's event. I would like to thank the Board of Directors, the Senior Management, Sports Presidents and Team Managers of all MIBA Member Institutions for the cooperation and contribution in ensuring the success of the Games and tonight's Dinner and for all of MIBA activities.
To everyone present tonight, I wish you all the best and hope you will have an enjoyable evening.
9 November 2013