KUALA LUMPUR: Malaysia’s second largest banking group by assets, the CIMB Group is considering venturing into Sri Lanka, specifically the stockbroking and commercial banking segments, said CEO Datuk Seri Nazir Razak.
He was speaking to reporters here yesterday at the “Invest Sri Lanka: Opportunities in a New Era” conference organised by CIMB and the Colombo Stock Exchange (CSE).
“As we understand Sri Lanka better and as we get momentum, then obviously we will look to diversify into more capital-intensive activities and that would include going into stock brokerage ourselves and also potentially into banking. Those are future possible moves for CIMB,” he said.
Nazir said CIMB is the first international investment bank to open a local office in Sri Lanka.
On Aug 4, CIMB entered into a joint venture with two leading Sri Lankan individuals to establish an investment banking and corporate advisory presence in Sri Lanka. CIMB holds a 51% stake in the joint venture through its wholly-owned subsidiary CIMB Securities International Pte Ltd, with the remaining 49% held by the other two individuals.
“CIMB’s current platform is an investment advisory platform. The investment capital is small at US$2 million [RM6.34 million], which involves hiring people for advisory work in Sri Lanka,” Nazir said.
Asked about the timeline for CIMB’s possible diversification in Sri Lanka, Nazir said: “Different markets require different entry methods, so we will wait and see.”
The conference aimed to provide a snapshot of what lies ahead for the Sri Lankan economy and why Sri Lanka is one of the most exciting investment destinations currently in the world.
Nazir said despite the tolls of unrest in Sri Lanka, the country’s economy has averaged 4.8% annual growth over the past 30 years.
“Sri Lanka is a great place for our corporates and institutions to look at investing,” said Nazir.
“It’s still a young capital market and stock exchange. But if you look at many of these young exchanges over the past few years, it can indeed grow extremely rapidly when the conditions are right,” he added.
Nazir said CIMB has been bringing a lot of investors from Asean to Sri Lanka to look at direct investment opportunities. At the same time, he said, CIMB is also soliciting for Sri Lankan corporates to help these investors raise capital either through equity or debt.
During the conference, CSE’s chairman Krishan Balendra pointed out that the exchange’s All Share Price Index achieved remarkable heights in 2009 and 2010, with the CSE being ranked as the second best performing market in the world in both years.
CIMB said the Sri Lankan government is targeting to double GDP per capita to US$4,000 by 2016 and reach US$6,000 per capita in 10 to 12 years — equivalent to Malaysia’s GDP per capita in 2009.
According to CIMB, CSE’s market capitalisation is equivalent to only 30% of Sri Lanka’s GDP, significantly lower than India (94%), Malaysia (173%), Indonesia (51%), Bangladesh (47%), and Thailand (87%).
In 2009 and 2010, the CSE was Asia’s best performing market, emerging an investor favourite after the end of the 26-year civil war which started in 1983.
This article appeared in The Edge Financial Daily, December 1, 2011.
He was speaking to reporters here yesterday at the “Invest Sri Lanka: Opportunities in a New Era” conference organised by CIMB and the Colombo Stock Exchange (CSE).
“As we understand Sri Lanka better and as we get momentum, then obviously we will look to diversify into more capital-intensive activities and that would include going into stock brokerage ourselves and also potentially into banking. Those are future possible moves for CIMB,” he said.
Nazir said CIMB is the first international investment bank to open a local office in Sri Lanka.
On Aug 4, CIMB entered into a joint venture with two leading Sri Lankan individuals to establish an investment banking and corporate advisory presence in Sri Lanka. CIMB holds a 51% stake in the joint venture through its wholly-owned subsidiary CIMB Securities International Pte Ltd, with the remaining 49% held by the other two individuals.
“CIMB’s current platform is an investment advisory platform. The investment capital is small at US$2 million [RM6.34 million], which involves hiring people for advisory work in Sri Lanka,” Nazir said.
Nazir says different markets require different entry methods.
Sri Lanka central bank governor Ajith Nivard Cabraal (left) shakes hands with CIMB Group CEO Datuk Seri Nazir after the launch of CIMB's Invest Sri Lanka 2011 conference organised by CIMB and the Colombo Stock Exchange.
Asked about the timeline for CIMB’s possible diversification in Sri Lanka, Nazir said: “Different markets require different entry methods, so we will wait and see.”
The conference aimed to provide a snapshot of what lies ahead for the Sri Lankan economy and why Sri Lanka is one of the most exciting investment destinations currently in the world.
Nazir said despite the tolls of unrest in Sri Lanka, the country’s economy has averaged 4.8% annual growth over the past 30 years.
“Sri Lanka is a great place for our corporates and institutions to look at investing,” said Nazir.
“It’s still a young capital market and stock exchange. But if you look at many of these young exchanges over the past few years, it can indeed grow extremely rapidly when the conditions are right,” he added.
Nazir said CIMB has been bringing a lot of investors from Asean to Sri Lanka to look at direct investment opportunities. At the same time, he said, CIMB is also soliciting for Sri Lankan corporates to help these investors raise capital either through equity or debt.
During the conference, CSE’s chairman Krishan Balendra pointed out that the exchange’s All Share Price Index achieved remarkable heights in 2009 and 2010, with the CSE being ranked as the second best performing market in the world in both years.
CIMB said the Sri Lankan government is targeting to double GDP per capita to US$4,000 by 2016 and reach US$6,000 per capita in 10 to 12 years — equivalent to Malaysia’s GDP per capita in 2009.
According to CIMB, CSE’s market capitalisation is equivalent to only 30% of Sri Lanka’s GDP, significantly lower than India (94%), Malaysia (173%), Indonesia (51%), Bangladesh (47%), and Thailand (87%).
In 2009 and 2010, the CSE was Asia’s best performing market, emerging an investor favourite after the end of the 26-year civil war which started in 1983.
This article appeared in The Edge Financial Daily, December 1, 2011.
