Malaysia’s Maybank Kim Eng is a leading brokerage house and investment bank based on trade value in Southeast Asian (ASEAN) countries with network spanning 11 countries with over 80 branches
Speaking to DEALSTREETASIA on the sidelines of Invest ASEAN Conference in Jakarta, Chong, an investment banking veteran with over 20 years of experience in investment banking, says the Indonesian bond market is relatively less developed compared to Malaysia and Singapore.
The debt securities market is only 15 per cent of the national gross domestic product, he says, while the ratio is about 100 per cent in Malaysia, 70 per cent in Singapore, 100 per cent in South Korea, and over 200 per cent in Japan.
Edited excerpts of the interaction:-
After Maybank’s recent expansion to Myanmar, what is your next course of action?
I think we are always looking for opportunities. Right now we are looking at about 10 other countries. Our main focus is the growing market here. Currently, we have just opened our office in Myanmar and that is something we want to grow. It is a part of our ASEAN expansion strategy.
ASEAN should be implementing AEC (Asean Economic Community) soon. How is Maybank preparing for this?
I think the principle of AEC is free flow of goods, services, labour, capital and investment. You know that in ASEAN we only serve 25 per cent of the trade, so there is a lot more to do. FDI is only 17 per cent among ASEAN countries.
We are having the “Invest ASEAN series” to encourage our ASEAN companies to become ASEAN multinationals. Not just limited to one country like Indonesia, or Malaysia, or Thailand or Singapore but to become regional companies so that we can compete with the rest of the world.
For Indonesia, the integrated markets will provide opportunities for more business, as the country is the largest market in the region.
What do you expect from Indonesia?
We have brought together about 60 investors with over $650 million funds and which they could invest in Indonesian companies. They are here to see how they can invest more in automotive, food & beverages and other sectors. We have a regional franchise.
Our Trade Minister has proposed ASEAN countries too use common currency like European countries. What do you think about that?
At this moment I don’t want comment on that.
What is your assessment of the SUKUK market opportunities in Indonesia?
There is a lot of liquidity in the SUKUK market globally even for Indonesia. That’s why I’m saying we need to have a deep bond market in Indonesia. Indonesian companies and corporates can tap the SUKUK market here in Rupiah or overseas (currency). You can distribute your bonds or SUKUK to Islamic funds not just commercial. So that’s why SUKUK is such a fantastic form of capital funding because conventional and Islamic funds can buy SUKUK.
Maybank is the top five arrangers of SUKUK in the world. In Indonesia, we just did in Garuda Indonesia SUKUK worth $500 million and there are many-many we are looking at but the laws and the policies must be in place. If there is an opportunity we want to advise government on their bond issuances.