Issue 14

Malaysia’s Kenanga Investors to acquire asset manager Libra Invest

Kenanga Investors Berhard (KIB), the asset management subsidiary of Malaysian lender Kenanga Investment Bank, is acquiring fund manager Libra Invest for a provisional purchase consideration of 50.1 million ringgit ($12 million), according to a statement. 

Under the purchase agreement, KIB will acquire the entire issued share capital, comprising 6.5 million shares, of the fund manager from ECM Libra Financial Group, the listed holding company of ECM Libra Group. 

Libra Invest, licensed under the Capital Markets and Services Act 2007, is principally engaged in the management of unit trust funds. It also offers fund management services. KIB, meanwhile, provides investment solutions ranging from collective investment schemes, portfolio management services, ETFs, financial planning and alternative investments for retail, high net-worth clients, corporate and institutional clients. 

“The synergies from the combined entity will be a driving force to accelerate growth and strengthen our business over the long term,” said Ismitz Matthew De Alwis, Executive Director and Chief Executive Officer of KIB. 

According to KIB, the final purchase consideration will be based on the net asset value of Libra Invest on the last day of the month preceding completion date and a premium of 35 million ringgit ($8.6 million). KIB group managing director Chay Wai Leong said the acquisition is part of the bank’s goal of broadening its footprint in the areas of asset and wealth management. 

The purchase is also expected to tip KIB’s assets under management over the 10 billion ringgit ($2.5 billion) mark. KIB aims to complete the acquisition by the third quarter of 2019, subject to regulatory approvals. 

In a disclosure to the Malaysian stock exchange, ECM Libra Group said 99.12 per cent of the proceeds, or 49.63 million ringgit, will be reinvested into the hospitality business, while the remaining 440,000 ringgit will be used to finance the estimated expenses for the proposed disposal. 

“The proposed acquisition provides an avenue for ECM Libra Group to unlock and realise the value of its investment in Libra Invest at an attractive premium,” the group said in its disclosure.


From – Deal Street Asia


PH payments app Mynt mimics model of its 45% stake owner Ant Financial

Mynt, the Philippine payments app backed by billionaire Jack Ma’s Ant Financial, plans to roll out insurance products en route to becoming a sprawling financial services platform in its Chinese ally’s image. 

The operator of GCash is now trying to become a conduit for insurance policies with the help of strategic partners that can help it expand a slate of products from banking and credit-scoring to financing and money market funds, Chief Executive Officer Anthony Thomas said in an interview. 

Mynt, 45 percent owned by Ant, is racing against ride-hailing services Grab and Tencent Holdings Ltd.-backed Voyager to tap a fledgling Philippine payments market. Mynt is one of nine digital wallets outside of China that Ant’s backed, as the Chinese funds-to-finance titan tries to forge a global payments network rivaling Visa Inc.’s. 

“What Ant brings to the table is a platform,” Thomas said during the Credit Suisse Asian Investment Conference in Hong Kong. “When I go to a global merchant, I’m going as part of a family of wallets connected with Ant Financial and that creates a network effect that makes us much more attractive to merchants.” Ma’s company is helping Mynt with risk management and technology that lets users scan an ID and faces for verification. 

The Philippines has only recently rolled out a national identity system. Ant Financial and Mynt also created a blockchain-based remittance service between Hong Kong and the Philippines with the help of Standard Chartered Plc in June. 

This year, Ant started blockchain remittance between Malaysia and Pakistan. Founded in 2004, Mynt is also 45 percent owned by Globe Telecom, a local mobile and broadband carrier. Philippine conglomerate Ayala Corp. owns the remaining 10 percent. 

The Manila-based company’s registered users had grown 2.5 times to 15 million by the end of last year. Monthly active users grew 3.5 times, Thomas said, declining to disclose specifics. Mynt has branched out from online payments. It’s now offering an instant-withdrawal bank savings service known as GSave in collaboration with CIMB Group Holdings Bhd. with annualized interest rates of about 2.5 percent, said Thomas. 

It rolled out credit-scoring system GScore and a credit finance service GCredit around April last year, he said. For a minimum 50 Philippine pesos, users can also invest in its money-market fund, operated by a third-party asset manager. Users earn interest rates of about 4 percent.

From – Deal Street Asia

Shanghai’s Nasdaq-inspired new board draws nine firms but where are the unicorns

Where are the unicorns? China’s first batch of candidates for its version of the tech-focused Nasdaq is an uninspiring bunch. Nine companies have been vetted for listing on Shanghai’s Science and Technology Innovation Board, out of 19 that filed applications. 

They’re also tiny, planning to raise just $1.6 billion combined. That’s a fraction of the $5.4 billion Xiaomi Corp. took in when it sold shares in Hong Kong last year. 

The names will ring few bells with investors: Jiangsu Beiren Robot System Co., a producer of automation equipment; Wuhan Keqian Biology Co., a maker of animal vaccines; and Amlogic Shanghai Co., a distributor of electronics parts, are among them. There’s no sign of glamorous candidates such as SenseTime Group Ltd., the world’s biggest artificial intelligence startup; Bytedance Ltd., the developer of the wildly popular TikTok video app; or Ant Financial, the payments affiliate of e-commerce giant Alibaba Group Holding Ltd. 

If the objective is to get the next Alibaba or Xiaomi to sell shares at home rather than deserting China to list in New York or Hong Kong, then the Shanghai technology board still has a lot to prove. On Friday, the regulator responded to investor disappointment by urging patience, saying the new board would need a run-in period. 

For a country that has the most unicorns after the U.S., the absence of big names is curious. Equally odd are some of the companies that do plan to list. They include China Railway Signal & Communication Corp., a state-owned and decidedly old-economy firms. 

Hong Kong-listed China Railway will seek to raise 10.5 billion yuan ($1.6 billion) selling shares on the Shanghai board. It may not be the only state-owned enterprise to do so. Xiao Yaqing, chairman of the State-owned Assets Supervision and Administration Commission, said last week that China is encouraging SOEs to spin off units for IPOs on the tech board. 

The Shanghai market may still present a threat to Hong Kong, the world’s largest IPO fundraising venue last year, and even to New York, which has also been a favored listing destination for China’s new-economy firms. 

A company can potentially raise far more money by selling shares at home because the new Shanghai market will remove an unofficial valuation cap of 23 times earnings on IPOs. The startup-heavy ChiNext index trades at a price-earnings ratio of 45. 

The tech board will be restricted to investors with at least two years of equity trading experience and 500,000 yuan of capital. There’s no shortage of money around, though. Domestic fund managers raised 124 billion yuan in anticipation of China depositary receipts, which have yet to be launched, while local equity mutual funds are holding as much as 13 percent of their portfolios in cash, according to Goldman Sachs Group Inc. analysts. 

Regulators have gone to lengths to make the Shanghai tech board an attractive destination for new-economy startups: Companies don’t need a profit track record and are allowed to use dual-class share structures. 

Listing will be via a U.S.-style registration system, meaning companies theoretically won’t need to wait in line to be vetted by the regulator. There are 1,800 companies waiting to sell shares on the main boards of the Shanghai and Shenzhen stock exchanges, including 265 that have already been approved, according to Goldman. Politics may see some big names opt for the Shanghai board, such as Ant Financial. The company’s lock on much of China’s digital payments industry means Beijing is likely to encourage it to list at home. 

Meanwhile, some surveillance-focused companies may find it hard to list overseas amid controversy over their business models. Even so, offshore will remain the favored IPO route for many startups, with some surveillance specialists rebranding themselves as “smart city” operators to win over foreign investors. 

Listing in Hong Kong or New York offers the chance to raise dollars and move money out of the mainland at a time of stricter capital controls, all beyond the prying eyes of Beijing regulators. 

Many Chinese technology companies have investment from foreign venture capitalists and use overseas accounting standards; switching to mainland standards is expensive and cumbersome. The Shanghai tech board may attract some exotic beasts. Unicorns are likely to prefer their overseas meadows.

From – Deal Street Asia

SoftBank leads $89m round in Chinese online pharmacy Dingdang Kuaiyao

Chinese online-to-offline (O2O) medicine retailer Dingdang Kuaiyao has raised RMB600 million ($89 million) in a Series C round of funding led by existing investor Softbank China Venture Capital, according to an announcement. 

Other investors including CMB International, CICC Capital (China International Capital Corporation), and Sinopharm-CICC Capital also participated in the round. Founded in 2014, Dingdang Kuaiyao was originally an online pharmacy and gradually extended its off-line physical pharmacy business. 

To date, the medicine retailer has raised a total of CN¥900 million in funding over three rounds and SoftBank China invested in the latest two series financing rounds, according to data from Crunchbase. 

Its business model is composed of online pharmacy, drug delivery, and offline smart pharmacy. The fast delivery service can satisfy those time-sensitive order request and serve customers who prefer delivery service such as the old, the disabled, etc. 

The online pharmacy also has professional drug consulting service for customers in need. Dingdang Kuaiyao has partnered over 600 pharmaceutical companies worldwide and formed FSC (Factory Service Customer) Pharmaceutical Alliance. 

It directly works with drug manufacturers and simplifies the supply chain by reducing the middle agent roles.

From – Deal Street Asia

Japan’s Rakuten to harvest gains of $900m from Lyft IPO

Japan’s Rakuten said on Monday it will book a 110 million yen ($989.74 million) gain in the quarter through March on its investment in Lyft following the U.S. ride-hailing firm’s listing last week. 

Rakuten become Lyft’s largest shareholder with a 13 percent stake ahead of its IPO. Lyft shares closed 9 percent higher at $78.29 in their market debut on Friday, giving the loss-making firm a market capitalization of around $22.2 billion. 

Rakuten‘s shares were down 3 percent by the midday break in Tokyo on Monday, underperforming the broader market. Its shares have climbed 38 percent this year on rising investor expectations of returns on its tech investments. 

Those bets include ride-hailing firm Careem, which is being acquired by Uber for $3.1 billion, and image sharing website Pinterest, which has filed for an IPO. 

Rakuten‘s finances are being squeezed with falling margins at its core e-commerce unit and it is making an ambitious attempt to break into Japan’s mature telecoms market with the start of carrier services in October.

From – Deal Street Asia
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