Leaders urged to resolve uncertainty

Star, Saturday March 15, 2008

Leaders urged to resolve uncertainty

PETALING JAYA: Political leaders should come together and speedily resolve the uncertainties faced by the country and business community.

“The outlook is uncertain and that is reflected in the equity and bond markets,'' said Datuk Nazir Razak, group chief executive officer of CIMB Bhd.

Urging the leadership and political parties to act speedily, he said the current situation was not very pro-business and the quicker it was resolved, the better.

CIMB's strategy is to increase its overseas exposure; however, it is still the local business that contributes the bulk of earnings. “We will do what we can, but it is still mostly local (business that is most significant),” Nazir said.

Even the outlook for the bond market has changed.

From left: RAM group deputy executive chairman Datuk C. Rajandram, Datuk Nazir Razak, Securities Commission chairman Datuk Zarinah Anwar and RAM group chairman Tan Sri Siti Norma Yaakob.
Two months before the election, about RM24bil was raised compared with just RM7.3bil approved in the previous corresponding period. However, the situation now was totally different, observed Nazir, and the uncertainty was not good for the business environment.

He was speaking yesterday evening after receiving the lead manager awards won by CIMB Investment Bank for the number of bond deals arranged and value of deals closed under Rating Agency Malaysia Bhd's (RAM) League Award 2007.

AmInvestment Bank executive director Pushpa Rajadurai noted there was ample liquidity, close to US$100bil, in the financial system to back up the projects under the Ninth Malaysia Plan.

“Unlike in other countries, Malaysia has the money to back up its projects,'' she said. As such, it is critical that the projects must go on and be delivered.

At another function yesterday evening, Panasonic Malaysia Sdn Bhd managing director Hiroshi Nakamura said it was not easy to determine the type of impact the local political situation would have on businesses locally.

“That is a tough question to answer, at least from a foreigner's point of view,” he told StarBiz before his farewell dinner yesterday.

“However, I certainly hope the Government will manage the situation properly and minimise whatever impact it would have (on businesses) locally,” he said.

Nakamura did add that the local political situation, should it have a negative impact on the economy, could hurt foreign investors' confidence and foreign direct investment in Malaysia.

“All the foreigners are watching very quietly and carefully to see what is going to happen,” he said.

“Malaysia is competing with many emerging countries such as Vietnam. From a foreigner's point of view, the political stability in a country as well as its economic well-being would definitely determine an investor's choice,” he added.

The atmosphere at the book launch of Senior Leadership Teams organised by the Hay group yesterday evening could be summed up as optimistic yet cautious.

While most greeted the change in the political landscape of the country with enthusiasm, they have taken a wait-and-see stance. A management consultant in his 30's said: “These are exciting times.”

Several from the mixed crowd comprising mainly corporate types and some from non-governmental organisations said it remained to be seen whether the administrations in non-Barisan Nasional (BN) governed states could deliver or govern, given the squabbling even before the dust had settled on the election in Perak.

Tan Sri Yong Poh Kon, president of the Federation of Malaysian Manufacturers, said in a statement yesterday: “Ongoing efforts to enhance efficiency of the public delivery system and improve the effectiveness of development policies at all levels and in all sectors should receive new impetus in commitment and fervour from all stakeholders.''

At the RAM awards, CIMB Investment Bank's Islamic division also bagged the lead manager awards for the number of deals and issue value.

The investment bank and its Islamic unit also received Special Merit Awards for being the country's top lead manager in 2007 for corporate bond and corporate sukuk markets.

However, the Special League Achievement Award 2007 went to Kuwait Finance House (M) Bhd, in recognition of its feats within RAM's league table, premised on the number of deals, value of deals closed and market share.

The Blue Print Award category (accorded to distinctive, ground-breaking bond or sukuk deals) went to Cagamas SME Bhd, the issuer of the best newly structured finance benchmark deal totalling RM600mil synthetic securitisation of SME loans. The lead managers were Aseambankers Bhd and Citibank.

Malakoff Corp Bhd won the award for the most innovative deal of the year for its RM6.2bil senior and RM1.7bil non-conservative junior sukuk musyarakah. It was lead managed by CIMB Investment Bank.

Binariang GSM Sdn Bhd won for the most outstanding deal of the year for RM19bil senior and RM3.02bil non-convertible junior sukuk musyarakah.

Lead managers for the RM19bil senior sukuk musyarakah were ABN AMRO Bank Bhd, AmInvestment Bank Bhd, Aseambankers Malaysia Bhd, CIMB Investment Bhd, RHB Investment Bank Bhd and OCBC Bank (M) Bhd. Lead manager for the RM3.02bil non-convertible junior sukuk musyarakah was CIMB Investment Bank.

The Industry Recognition Award for outstanding contribution to elevating Malaysia's standing in the global financial market went to Aseambankers.