KUALA LUMPUR: Specialist capital markets group Affin Hwang Capital is projecting a robust outlook for its businesses now that it has completed its post-merger house cleaning.
“The merger between the investment banking businesses of Affin and HwangDBS (M) Bhd that took place in 2014 and last year has mostly been a painful period of streamlining for both businesses,” said group managing director Datuk Maimoonah Hussain in an interview with Business Times recently.
“Last year was mostly about strategically marrying our businesses, which saw us undergoing exercises such as premises rationalisation and the mutual separation scheme that cost us some RM60 million, but all those had been budgeted. And now is the time to grow our business,” she said.
The group has three principal business areas — investment banking (including treasury and markets), securities (including research) and asset management.
“Right now, all three segments are contributing more or less to our bottom line, but the greatest potential for growth is asset management, where we expect to gain recurring income.”
Maimoonah said prior to the merger, the group only had some RM2 billion in assets under management (AUM) but this jumped exponentially after the merger.
“We are managing some RM35.5 billion worth of AUM as of September. It has been a huge jump and we foresee that this is a segment where we can grow.
“We are very optimistic about our asset management segment as we have consistently outperformed the market. The industry itself is an industry of growth because of all the infrastructure, and our demography shows growing income and financial literacy.
“We have seen that Malaysians have been saving more over the years and one of our objectives is for them to convert from deposit accounts into financial assets,” she said.
Malaysia will remain as Affin Hwang Capital’s key market, but this does not mean the group will not ride on existing regional free-trade agreements.
“Our business has a wide domestic coverage and strategic network across Malaysia, but we also have strategic alliances in different countries like Thailand and Japan.
“We have a strategic partnership with Japan’s Daiwa Securities, which provides us with greater reach across Asian and global markets for institutional equities trading,” said Maimoonah.
“We are also very keen on more partnerships across the region because this will enable us to expand our reach while being as cost efficient as possible,” she said, adding that the group was targeting to enter Indonesia via partnerships next year.
Affin Hwang Capital also has some 11 per cent market share of Bursa Malaysia’s trading volume, a jump from three per cent before the merger.
“The challenge within the local equities landscape is that it is very much institutional-driven,” said Maimoonah.
“In order for the market to further deepen, we need to have more retail investors and this is something that all stakeholders, including us, other investment banks, Bursa Malaysia and the Securities Commission, are addressing right now.”
Affin Hwang Capital is the investment banking arm of Affin Holdings Bhd, which closed one sen lower to RM2.17 last Friday.