April 30 (Bloomberg) -- RHB Capital Bhd., 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. 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. 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.
“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 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.
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, 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’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 M&A, it’s work in progress.”
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