Issue 35

Malaysia’s largest fund manager PNB confirms CEO reshuffle

Malaysia’s state-linked investment fund Permodalan Nasional Bhd (PNB) has confirmed the impending departure of its current president and group chief executive Abdul Rahman Ahmad upon the completion of his contract on September 30, 2019. 

The development was first reported by on Tuesday. In a statement on Wednesday, PNB said Abdul Rahman will assume the position of non-independent non-executive and chairman at Malaysian conglomerate Sime Darby Bhd, succeeding current chairman Wan Abdul Aziz Wan Abdullah who is retiring on October 31. 

The $72-billion state investment fund owns a 52 per cent stake in Sime Darby. Established by the Malaysian government in 1978, PNB currently has over 300 billion ringgit ($72 billion) in assets under management. 

PNB also announced the appointment of Jalil Rasheed who will take over Abdul Rahman’s role as president and group chief executive, effective October 1. Jalil is currently the CEO of the South Asian operations for US-headquartered Invesco. He was earlier the CEO of Aberdeen Islamic Asset Management before leaving for Invesco in 2013. 

“Previously based overseas, his appointment is in line with the government’s wish to make optimal use of Malaysian global talents and consistent with PNB’s strategic initiative to diversify its assets globally,” said the fund. Separately, in a filing to Bursa Malaysia today, Sime Darby said its current chairman Wan Abdul Aziz plans to retire due to health reasons. 

To facilitate the transition, Abdul Rahman will take on the role of non-independent non-executive on September 1 before assuming the role of chairman in October. 

Abdul Rahman started his career at Arthur Andersen, London and later served as special assistant to the executive chairman of Trenergy (M) Bhd/Turnaround Managers Inc (M) Sdn Bhd. Subsequently, he joined Pengurusan Danaharta Nasional Bhd as unit head and later went on to become an executive director of SSR Associates Sdn Bhd. 

He then assumed the post of group managing director/CEO of Malaysian Resources Corp Bhd and subsequently served the same position for Media Prima Bhd. Before becoming the president and group CEO of PNB in 2016, Abdul Rahman was the CEO of state-linked private equity firm Ekuiti Nasional Bhd (Ekuinas).


From – Deal Street Asia


Malaysia’s RHB Bank aims to complete sale of insurance arm by March-end

RHB Bank Bhd, Malaysia’s fourth-biggest lender by assets, aims sell most of its stake in its general insurance unit by the end of the first quarter of next year, its group managing director said on Monday. 

The bank said at the end of July it had permission from Malaysia’s central bank to commence talks to sell up to 94.7% of its shares in RHB Insurance to Tokio Marine Asia Pte Ltd, a unit of Japan’s Tokio Marine Holdings Inc. 

On Monday, Group Managing Director Khairussaleh Ramli told reporters at an earnings briefing that discussions are ongoing and that Tokio Marine has started due diligence on the insurer. Ramli said the bank hoped to complete discussions by the end of October and seek regulatory approval in November. 

“Hopefully everything goes well and we can come up with something we can put forward to both Bank Negara as well as the Ministry of Finance for their approval,” he said. 

RHB Bank reported net profit of 615.4 million ringgit ($146.87 million) for April-June, 7.9% more than the same period last year, due mainly to higher non-funds based income and lower expected credit losses. 

Revenue rose 12.1% to 3.42 billion ringgit. The bank’s shares rose as much as 1.1% after it announced its earnings results on Monday. The broader market fell 1.0%.

From – Deal Street Asia

Toyota, Suzuki deepen ties by taking stakes in one another

Toyota Motor Corp. and Suzuki Motor Corp. are strengthening their relationship by taking stakes in one another, the latest alliance in an industry that’s facing sweeping changes in technology, consumer preferences and business models. Japan’s biggest automaker will acquire about 5% of Suzuki shares for about 96 billion yen ($907 million), while Suzuki will get a smaller holding valued at about 48 billion yen in Toyota, the automakers said in statements Wednesday. 

The move builds on ties established two years ago between the two carmakers and is aimed at expanding their collaboration to keep up with electric and self-driving cars, as well as growing demand for on-demand rides and new businesses that are reinventing how people get from A to B. For Toyota, the deal adds yet another automaker to the company’s expanding portfolio of partnerships, which includes Mazda Motor Corp. and Subaru Corp. 

“As the late Sergio Marchionne often reminded his peers, there are too many automakers doing very similar things,” said Ali Izadi-Najafabadi of Bloomberg New Energy Finance’s Intelligent Mobility group, referring to the Fiat Chrysler Automobiles NV CEO who died last year. “Suzuki and Toyota have unique attributes complementing each other.” Toyota will pay 4,004 yen a share, lower than Suzuki’s closing price of 4,085 yen on Wednesday. Suzuki shares are down 27% this year, following a 15% decline in 2018 as the Indian economy cooled. 

“Toyota is getting Suzuki at an attractive valuation,” said Janet Lewis, an analyst at Macquarie Capital Securities (Japan) Ltd. “It appears to be very similar to the mutual investments made between Toyota and Mazda.” 

Autonomous Driving 

Suzuki said it will use 20 billion yen of the proceeds on development of new technologies including autonomous driving, and the remainder to replenish its capital. 

Suzuki is seeking to team up with a larger carmaker after an acrimonious split with Volkswagen AG. Toyota has budgeted about seven times more on research and development than Suzuki for this fiscal year, and the smaller automaker has pointed to the soaring cost of making competitive cars as a reason to join forces with a partner. 

“On autonomy, it makes more sense for Suzuki to rely on Toyota because it requires a lot of time and money,” Izadi-Najafabadi said. Alliances are becoming ever more critical in the global auto industry, as manufacturers seek to pool resources and save costs. Ford Motor Co. has teamed up with Volkswagen AG, while Honda Motor Co. and General Motors Co. are working together. 

There’s also the three-way alliance of Renault SA, Nissan Motor Co. and Mitsubishi Motors Corp., which has been on shaky ground since the arrest of former Chairman Carlos Ghosn in November. 

India Foothold 

The deal gives Toyota greater access to Suzuki’s presence in India, which is on track to overtake Japan and become the world’s third-largest vehicle market. 

While Suzuki is small in other markets, it occupies almost half of the market share in India. Sales at Suzuki’s Indian subsidiary fell 34% in July, the worst decline in almost seven years, as a slowdown in consumer spending, the largest driver of growth in the $2.7 trillion economy, became more pervasive. 

In February 2017, Toyota and Suzuki agreed to begin “concrete examination” of a partnership in technology and procurement. A year later, they agreed to sell each other’s hybrid cars and other vehicles in India. 

This March, Toyota further expanded the alliance to supply its hybrid system to Suzuki globally, while Suzuki will sell compact vehicles through Toyota in India and Africa. The carmakers also said they plan to produce joint battery electric cars in India around 2020.

From – Deal Street Asia

HK central bank acquires 25% stake in Sydney’s Wynyard Place for $303m

Hong Kong’s currency board and de facto central bank, Hong Kong Monetary Authority (HKMA), has reportedly acquired a 25 per cent stake in Sydney’s Wynyard Place development for A$450 million ($303 million). 

The acquisition was carried out by AMP Capital, which is an existing investor in the $1.2 billion project, on behalf of the HKMA, according to a report by the Australian Financial Review. 

The Sydney-headquartered global investment manager already owns nearly 50 per cent of Wynward Place, after it bought a 25 per cent stake through its Wholesale Office Fund and another 24.9 per cent stake on behalf of its client UniSuper last year from global fund investor and developer Brookfield. 

Carl Schibrowski, Head of Development – Australia at Brookfield Property Partners, earlier said the property will be one of Australia’s premier commercial and retail precincts due to its architectural design, location in the heart of the Sydney central business district, and its integration with one of the city’s busiest commuter nodes, Wynyard. 

The Wynyard Place stake acquisition is HKMA’s second investment in Sydney this year. In March, the central bank increased its interest in International Tower 1, a Sydney office building, for more than A$200 million ($134 million). 

Both HKMA and AMP Capital have not issued a statement about the latest investment. Still under construction, Wynyard Place is a 75,000 square meter precinct that will have a 59,000 sq m office tower across 27 levels, two heritage buildings undergoing restoration, and an upgrade of Wynyard train station’s George Street. 

The restoration of Shell House and 285 George Street, will see both heritage properties returned to their original use as prestigious office buildings. The project is due to be completed next year. According to the AFR report, insurance giant Allianz will be moving its Sydney headquarters to the precinct when it is built. 

National Australia Bank will also move into the complex. Early this month, Singapore’s sovereign wealth fund GIC announced that it was acquiring a 25.1 per cent stake in Lendlease International Towers Sydney Trust (LLITST) from Canada Pension Plan Investment Board (CPPIB) and Australia-based property developer Lendlease. 

LLITST holds assets located in the Barangaroo Office Precinct in the Sydney central business district (CBD) – close to Darling Harbour. Financial terms of the deal were not disclosed.

From – Deal Street Asia

Thailand plans to introduce new e-commerce tax next year

Thailand expects to introduce a value-added-tax on electronic businesses next year, aiming to collect between 3 billion to 4 billion baht ($98 million to $131 million) a year, an official said on Monday, tapping a boom in e-commerce in the country. 

The tax is expected to seek parliamentary approval this year, Ekniti Nitithanprapas, director-general of the Revenue Department, told reporters, without elaborating. E-commerce is surging in Thailand where entrepreneurs sell products directly to customers via Facebook, Instagram and messaging apps like Japan’s Line Corp. 

Driven by upgrades to mobile banking apps, sales via social media in Thailand more than doubled to 334.2 billion baht ($10.92 billion) in 2017, according to the latest report from the country’s Electronic Transaction Development Agency. 

Ekniti said the government is targeting overall tax revenue of 2 trillion baht in the current fiscal year to Sept. 30, and rising to 2.116 trillion baht in the next fiscal year.

From – Deal Street Asia
 All Rights Reserved 2019.

9 Temasek Boulevard Suntec Tower 2
#09-01 Singapore 038989
+65 6407 1344

[References] [Disclosure]