CIMB: Malaysia’s large IPOs expected to raise RM10b in first half of 2018

KUALA LUMPUR, Jan 4 — The large initial public offerings (IPOs) in Malaysia are expected to raise more than RM10 billion in the first half of this year, CIMB Investment Bank head of equity and capital markets and syndication for Asia Derek Lim said today.

“This is supported by some jumbo IPOs which are likely from infrastructure, consumer, and financial services sectors. In addition, the small and mid-cap companies would also continue to be quite robust,” he said at the media briefing of CIMB 10^th Annual Malaysia Corporate Day here.

CIMB Group chief executive officer Tengku Datuk Seri Zafrul Aziz who was also present said that the bank is expected to do well this year despite it being an election year in Malaysia.

“This will not likely impact the bank, as the market has already factored it in, whilst strong fundamentals and economic growth should augur  well for the banking sector,” he said.

Zafrul said CIMB is on track to cut its cost-to-income ratio by half, raise its Common Equity Tier 1 to 12 per cent, meet the revised target on return of equity to between 10.5 to 11 per cent, and increase the income distribution for consumer and commercial banking to 60 per cent.

Zafrul explained that the plans are already in the pipeline for the next growth strategy plan.

“Whilst the group expects provisions to be lower in 2018 from last year, I expect the Malaysian banks to see loan growth could be between 4 to 5 per cent based on the current pipeline,” he said.

The group CEO said 2018 is buoyed by a positive outlook and strong fundamentals that could boost the market, and expects the bond and sukuk issues in Malaysia to reach RM90 billion this year, underpinned by infrastructure projects.

Zafrul also said CIMB is on track to cover the entire South-east Asian region by the third quarter of this year.

He said CIMB had established digital banking presence in Vietnam at the end of 2017 and is now setting its sights on a presence in the Philippines presence this year.

“We are optimistic with the Philippines presence at some time in the 3Q this year and we will have a complete Asean footprint once the launch has been completed.

“The group has also look for the portfolio optimisation by joint venture in stockbroking business with China Galaxy Securities Co Ltd which will also be completing in Q32018,” added Zafrul who said upon completion, CIMB’s stockbroking business will effectively be relocated as a pure play broker with the client base of a universal Asean bank.

He noted that the group has likely achieved all its 2017 goals, which will be announced at CIMB’s 2017 financial year announcement that will takes place at the end of February.