This is my favourite card game, and the only game I would play when I am at a casino, which meant that I do not frequent the casinos in Malaysia and Singapore. They do not have Texas Holdem for players only (the Carribean and other versions are stupid odds-favouring the casino bullshit games) because its a low yielding game. Money basically changes hands among the players themselves and the house just takes a cut after every hand. Too small for the casinos in Malaysia and Singapore apparently.
I don't undrestand that because the biggest gaming place is Macau and Texas Holdem is very big there as in everywhere else.Most people like poker, but nothing can compare to Texas Holdem because of the various possibilities. Many people who play like to think they are good players, me included (lol), just like many people who invest in stockmarkets like to think they are better than the average (again, wrong). To make money in stockmarkets you NOT only have to be better than 50% of the players. You have to be in the top 20% because only 20% or so really make money over the long run, the other 80% will eventually lose - want to know why, come to the seminar on 14 April and remind me to tell you.
Anyway, back to the game, got nothing to write about the local markets for the past many weeks cause its a punting penny stocks phase. If I write, then I am becoming too speculative, so better not to write anything. Only thing worth writing about, which I have written already, is plantations. I think if you stick to second tier plantations, you should be getting 30%-50% return if you hold for rest of the year (i.e. NOT IOI Corp, Sime Darby, UM, ... go for those I did not mention).
I like the game because its not about cards or what you have, most games end up not having to flip over any cards, so I don't know why people are so enamoured over what two cards they have in the first place. The first video is the great Johnny Chan, why, he shows us clearly never to fall in love with high pairs. Be them aces, kings, queens ... many people will never get away from them. The flop shows 6, J, J .... and you have two players in as well. Chances are high that at least someone will "decent high cards", i.e. J (one out of 4 cards in the other two persons).. not to mention anyone having a solo 6 to boot, your pocket Aces is almost worthless after the flop. But how many will still keep playing them with gusto, and wondering why they lost.
Play the players and your math skills. People wondered why they never make a lot of money when they have big cards, they curse when they get small pots when they have high pairs ... then that person does not understand and appreciate the game that well. Big pots has to do with somebody else having a hand and the flop has to be open and having some thing for everyone.
Among the current crop of players I really like is Tom Dwan, he is young and has balls of steel. Watch how he plays in a CASH game. He never needs to have the best hand. His skill is trying to make others think you have the ultimate best hand. After the K came out on the turn, his cards does not matter anymore. All Tom is doing is making the other person think he has the best hand. Maybe it does not work all the time because the ultimate best hand usually only happens 1 in 10 hands. But you still need balls of steel.
Because in a hand, when Phil Laak has the K pair, he can be beat by trips 5s, hidden pairs of 3s, or trips Qs.
Which is why, if you want to master the game (you will never, btw) instead of watching great wins, study the great folds. Ask yourself, would you have folded if you held those hands.
Tuesday, 27 March 2012
Thursday, 22 March 2012
Music Empowering Women
I still remembered the recent talk show section in BFM which focused on why women aren't climbing the corporate ladder more successfully. The world has never been treating women nowhere near fair since the beginning of time. Just pluck any cross section from historic times. We have made strides over the past 100 years or so but oh, we still are so far from being "fair".
In the corporate world, much has been said about women being represented in the board rooms and top management. The US being a much touted place for equality, and even Australia, are still poorly represented in those areas.
Do we dare to say women are not as capable? I don't think so. Look at the academic results for the past 20 years, given a fair go, women generally outperform men. Maybe success and a career in the corporate world requires more than just academic excellence, for sure actually. Leadership skills, charisma, interpersonal skills, soft skills, high EQ, ambition, resilience of character, risk taking ability ... while most of those may "favour men" in their "natural makeup", it is not absolute.
The burden for women when it comes to child bearing, family, birth control, victims of sexual discrimination and abuse, etc... is for all to see. For a woman to make it to the same position as a man demands even more "productivity", perseverance and intelligence from them. Luckily for many women, that is not too difficult because men are generally assholes, yes, especially in the corporate world of chumminess, scratch my back - I scratch yours, old school ties, collusive behaviour, etc..
Sadly, the same can be said for women in relationships. Many are still locked in a time warp. Taking charge, knowing your worth as a person, self actualisation, being responsible for your own happiness ... are important objectives for a well functioning person of any gender. To rely on men to "open up" the boundaries for women is too passive. Too many women still play the role of "victims", docile in too many ways that represses the character. Too reliant on the other party for one's happiness and well being.
Equality for the sake of equality is hollow an ideal. Equality because we know its the right thing to do, because we are different yet the same, respecting the soul and integrity of a person ... then that means the world.
There are wonderful songs about empowering women (no, not I've Never Been To Me ... which is very much the exact opposite to what I have been writing):
Lesley Gore's "You Don't Own Me" back in 1964 says so much ...
Burt Bacharach's wonderful song sung resolutely by Dionne Warwick in 1963. "Don't Make Me Over".
What a song title by Meredith Brooks, all about the angst of being a female, in the roles of a girlfriend, mother, wife, daughter, lover.
Tori Amos' Silent All These Years, a thinking woman's empowering song, note the gut wrenching lyrics.
Excuse me but can I be you for a while
My dog won't bite if you sit real still
I got the anti-Christ in the kitchen yellin' at me again
Yeah I can hear that
Been saved again by the garbage truck
I got something to say you know
But nothing comes
Yes I know what you think of me
You never shut-up
Yeah I can hear that
But what if I'm a mermaid
In these jeans of his
With her name still on it
Hey but I don't care
Cause sometimes
I said sometimes
I hear my voice
And it's been here
Silent All These Years
So you found a girl
Who thinks really deep thougts
What's so amazing about really deep thoughts
Boy you best pray that I bleed real soon
How's that thought for you
My scream got lost in a paper cup
You think there's a heaven
Where some screams have gone
I got 25 bucks and a cracker
Do you think it's enough
To get us there
Cause what if I'm a mermaid
In these jeans of his
With her name still on it
Hey but I don't care
Cause sometimes
I said sometimes
I hear my voice
And it's been here
Silent All These...
Years go by
Will I still be waiting
For somebody else to understand
Years go by
If I'm stripped of my beauty
And the orange clouds
Raining in head
Years go by
Will I choke on my tears
Till finally there is nothing left
One more casualty
You know we're too easy Easy Easy
Well I love the way we communicate
Your eyes focus on my funny lip shape
Let's hear what you think of me now
But baby don't look up
The sky is falling
Your mother shows up in a nasty dress
It's your turn now to stand where I stand
Everybody lookin' at you here
Take hold of my hand
Yeah I can hear them
But what if I'm a mermaid
In these jeans of his
With her name still on it
Hey but I don't care
Cause sometimes
I said sometimes
I hear my voice [x3]
For pure fun, Shania's "Man! I Feel Like A Woman!". Nuff said.
In the corporate world, much has been said about women being represented in the board rooms and top management. The US being a much touted place for equality, and even Australia, are still poorly represented in those areas.
Do we dare to say women are not as capable? I don't think so. Look at the academic results for the past 20 years, given a fair go, women generally outperform men. Maybe success and a career in the corporate world requires more than just academic excellence, for sure actually. Leadership skills, charisma, interpersonal skills, soft skills, high EQ, ambition, resilience of character, risk taking ability ... while most of those may "favour men" in their "natural makeup", it is not absolute.
The burden for women when it comes to child bearing, family, birth control, victims of sexual discrimination and abuse, etc... is for all to see. For a woman to make it to the same position as a man demands even more "productivity", perseverance and intelligence from them. Luckily for many women, that is not too difficult because men are generally assholes, yes, especially in the corporate world of chumminess, scratch my back - I scratch yours, old school ties, collusive behaviour, etc..
Sadly, the same can be said for women in relationships. Many are still locked in a time warp. Taking charge, knowing your worth as a person, self actualisation, being responsible for your own happiness ... are important objectives for a well functioning person of any gender. To rely on men to "open up" the boundaries for women is too passive. Too many women still play the role of "victims", docile in too many ways that represses the character. Too reliant on the other party for one's happiness and well being.
Equality for the sake of equality is hollow an ideal. Equality because we know its the right thing to do, because we are different yet the same, respecting the soul and integrity of a person ... then that means the world.
There are wonderful songs about empowering women (no, not I've Never Been To Me ... which is very much the exact opposite to what I have been writing):
Lesley Gore's "You Don't Own Me" back in 1964 says so much ...
Burt Bacharach's wonderful song sung resolutely by Dionne Warwick in 1963. "Don't Make Me Over".
What a song title by Meredith Brooks, all about the angst of being a female, in the roles of a girlfriend, mother, wife, daughter, lover.
Tori Amos' Silent All These Years, a thinking woman's empowering song, note the gut wrenching lyrics.
Excuse me but can I be you for a while
My dog won't bite if you sit real still
I got the anti-Christ in the kitchen yellin' at me again
Yeah I can hear that
Been saved again by the garbage truck
I got something to say you know
But nothing comes
Yes I know what you think of me
You never shut-up
Yeah I can hear that
But what if I'm a mermaid
In these jeans of his
With her name still on it
Hey but I don't care
Cause sometimes
I said sometimes
I hear my voice
And it's been here
Silent All These Years
So you found a girl
Who thinks really deep thougts
What's so amazing about really deep thoughts
Boy you best pray that I bleed real soon
How's that thought for you
My scream got lost in a paper cup
You think there's a heaven
Where some screams have gone
I got 25 bucks and a cracker
Do you think it's enough
To get us there
Cause what if I'm a mermaid
In these jeans of his
With her name still on it
Hey but I don't care
Cause sometimes
I said sometimes
I hear my voice
And it's been here
Silent All These...
Years go by
Will I still be waiting
For somebody else to understand
Years go by
If I'm stripped of my beauty
And the orange clouds
Raining in head
Years go by
Will I choke on my tears
Till finally there is nothing left
One more casualty
You know we're too easy Easy Easy
Well I love the way we communicate
Your eyes focus on my funny lip shape
Let's hear what you think of me now
But baby don't look up
The sky is falling
Your mother shows up in a nasty dress
It's your turn now to stand where I stand
Everybody lookin' at you here
Take hold of my hand
Yeah I can hear them
But what if I'm a mermaid
In these jeans of his
With her name still on it
Hey but I don't care
Cause sometimes
I said sometimes
I hear my voice [x3]
For pure fun, Shania's "Man! I Feel Like A Woman!". Nuff said.
Monday, 19 March 2012
Chart Of The Year
I have always had the same chart, only instead of level of income, I had the level of development of each country. The less developed would see more corruption and so on. The chart below says the same thing but on matters that speaks clearer to us. You want to know how to get higher income per capital (i.e. the average annual income per person for that country)... yes, less corruption.
To be fair, there are a few discussion points to the above chart. Indonesia for example has an abnormally large number of islands and people living in secluded areas which may be difficult to reach or partake of the general business economic activity. They may be classified as self sustaining farmers at best, people really living off the land and sea. Hence when you average them out as well, Indonesia's real figure should be a lot higher. Same goes for China.
To be fair, corruption exists in every country, its the level of pervasiveness and the relative amount of leakages. We know that Taiwan and Korea are not very clean as well, the ties between the triads and government officials in Taiwan is well known, the unusually cozy relationships between major corporate figures and the Korean government is also well documented.
We cannot be too optimistic that eradication of corruption can be done in 10 years or even 20. I mean HK took at least 20 years and Singapore needed a heavy handed treatment for a very long time. Hence even if we do effect a change in government in the next elections, safe to say its just baby steps, but at least we must move forward.
This makes Malaysia's position even more untenable. Except for HK, I believe Malaysia's per capita income was higher than Korea, Singapore, Taiwan some 35 years ago ... vellapan ... do we need to ask why, we all know why. That is why when I hear politicians championing how good Malaysia's growth had been for the last 20 years ... we have actually been grossly underperforming.
Sunday, 18 March 2012
Global Capital Flows - Developing Markets
Excellent analysis piece from Bloomberg Markets, my fav biz mag, on global capital flows to developing and frontier markets. Some call it emerging markets, but we need to divide them to developing and frontier to be more precise. Following the sub prime crisis and the subsequent Euro-crisis, the trend towards more exposure for emerging markets should be increased.
How investors allocate their funds is what we call capital flows. Owing to the size of the recipient countries, such flows can make a huge difference to these markets. As much as investors can plough into MSCI markets, they can also take out funds. Last year, the MSCI valuations dropped some 20% on the view that the Europe's debt crisis would curb global growth. In January 2012, the figure was 30% off its historical average.
Realising a calmer settlement to the Greece-led debacle, it is fair to say that valuations and funds should start coming back to MSCI countries. However, not all will benefit in the same manner, fund managers will index some of their holdings but many will allocate according to "outlook".
Using IMF data 2012-2016, Bloomberg Markets have created a top markets for attractiveness:
(country) (cumulative GDP growth) / (gov debt/GDP) / PE / (ease of doing business, lower the better)
1 China 46.7% / 16% / 11.5x / 91
2 Thailand 23.3% / 45.3% / 12.5x / 17
3 Peru 23.7% / 13.6% / 11.6x / 41
4 Chile 19.4% / 10.7% / 18.2x / 39
5 Malaysia 18.6% / 56.8% / 17.3x / 18
6 Poland 19.7% / 55.9% / 8.3x / 62
7 Turkey 16% / 35.4% / 11x / 71
8 Russia 23.3% / 15% / 5x / 120
9 Indonesia 30.3% / 21.4% / 16.7x / 124
15 India 35% / 60.7% / 15.3x / 132
There are a few notables, the BRICs which were the flavour of the decade, have slipped enormously. Despite China still holding onto the number one position, its attractiveness in terms of growth has slowed, and that is understandable owing to the much larger base that they have grown to. Brazil has dropped out of the top 15, mainly owing to very exorbitant inflation and extremely high PE valuations. India has also dropped to #15 mainly due to inflation which is expected to average 6% for the next few years.
One main determinant in attractiveness, which I have not put up is inflation rate expectations. The ones downgraded have exceptionally high inflation, which cancels out much of the growth and puts in a lot of side economic and operating problems. Russia's inflation is expected to average 6.8%, while the rest are maintaining below 3%.One can also argue that certain countries published inflation rate may be managed, which may explain why China is not as attractive now despite posting a likely inflation rate of just 3.1% for the next few years as many deem that to be way understated.
Indonesia which is way more favoured by foreign funds than Malaysia is ranked lower because of its 5.3% inflation rate. Malaysia seems to come out well from the rankings, and must continue to improve its ease of doing business as that has helped a lot. However our government debt as a percentage of GDP has to come down to below 30% soon or it will just spiral out of control. Inflation is at 2.4% but we all know its actually closer to 3.5%, don't we. We also have the problem of managing inflation via excessive subsidy, and that is a bad thing. The sooner we dismantle them except for critical items, the better.
One bad sign creeping in among big listed Malaysian firms is the "tidak payah" attitude in soliciting foreign funds investment. A couple of international houses which did major roadshows to the US and Europe saw only a couple of Malaysian firms willing to join while they get some 15 firms from Indonesia. Is it because many of them are GLCs? But even the multi millionaire Malaysian owners are not keen. While the Indonesian contingent are made up of mostly billionaire owners - go figure.
I believe this attitude stems primarily from the local funds (PNB and EPF) being very substantial shareholders of many of the Malaysian big listed firms. This is not a good development for many reasons. When everything is so cosy, there tend to be too much government to big listed firms contract given at the expense of smaller players. Business becomes for the big boys only. The cosier the relationship, the more likely you are to be loose on corporate governance, related party transactions and even transparency issues.
We have to ask ourselves honestly, are we propping up the listed index with our own money? If we reduce EPF and PNB funds by half, will foreign funds come in to buy? If not, do you know why? Or we just don't care!
How investors allocate their funds is what we call capital flows. Owing to the size of the recipient countries, such flows can make a huge difference to these markets. As much as investors can plough into MSCI markets, they can also take out funds. Last year, the MSCI valuations dropped some 20% on the view that the Europe's debt crisis would curb global growth. In January 2012, the figure was 30% off its historical average.
Realising a calmer settlement to the Greece-led debacle, it is fair to say that valuations and funds should start coming back to MSCI countries. However, not all will benefit in the same manner, fund managers will index some of their holdings but many will allocate according to "outlook".
Using IMF data 2012-2016, Bloomberg Markets have created a top markets for attractiveness:
(country) (cumulative GDP growth) / (gov debt/GDP) / PE / (ease of doing business, lower the better)
1 China 46.7% / 16% / 11.5x / 91
2 Thailand 23.3% / 45.3% / 12.5x / 17
3 Peru 23.7% / 13.6% / 11.6x / 41
4 Chile 19.4% / 10.7% / 18.2x / 39
5 Malaysia 18.6% / 56.8% / 17.3x / 18
6 Poland 19.7% / 55.9% / 8.3x / 62
7 Turkey 16% / 35.4% / 11x / 71
8 Russia 23.3% / 15% / 5x / 120
9 Indonesia 30.3% / 21.4% / 16.7x / 124
15 India 35% / 60.7% / 15.3x / 132
There are a few notables, the BRICs which were the flavour of the decade, have slipped enormously. Despite China still holding onto the number one position, its attractiveness in terms of growth has slowed, and that is understandable owing to the much larger base that they have grown to. Brazil has dropped out of the top 15, mainly owing to very exorbitant inflation and extremely high PE valuations. India has also dropped to #15 mainly due to inflation which is expected to average 6% for the next few years.
One main determinant in attractiveness, which I have not put up is inflation rate expectations. The ones downgraded have exceptionally high inflation, which cancels out much of the growth and puts in a lot of side economic and operating problems. Russia's inflation is expected to average 6.8%, while the rest are maintaining below 3%.One can also argue that certain countries published inflation rate may be managed, which may explain why China is not as attractive now despite posting a likely inflation rate of just 3.1% for the next few years as many deem that to be way understated.
Indonesia which is way more favoured by foreign funds than Malaysia is ranked lower because of its 5.3% inflation rate. Malaysia seems to come out well from the rankings, and must continue to improve its ease of doing business as that has helped a lot. However our government debt as a percentage of GDP has to come down to below 30% soon or it will just spiral out of control. Inflation is at 2.4% but we all know its actually closer to 3.5%, don't we. We also have the problem of managing inflation via excessive subsidy, and that is a bad thing. The sooner we dismantle them except for critical items, the better.
One bad sign creeping in among big listed Malaysian firms is the "tidak payah" attitude in soliciting foreign funds investment. A couple of international houses which did major roadshows to the US and Europe saw only a couple of Malaysian firms willing to join while they get some 15 firms from Indonesia. Is it because many of them are GLCs? But even the multi millionaire Malaysian owners are not keen. While the Indonesian contingent are made up of mostly billionaire owners - go figure.
I believe this attitude stems primarily from the local funds (PNB and EPF) being very substantial shareholders of many of the Malaysian big listed firms. This is not a good development for many reasons. When everything is so cosy, there tend to be too much government to big listed firms contract given at the expense of smaller players. Business becomes for the big boys only. The cosier the relationship, the more likely you are to be loose on corporate governance, related party transactions and even transparency issues.
We have to ask ourselves honestly, are we propping up the listed index with our own money? If we reduce EPF and PNB funds by half, will foreign funds come in to buy? If not, do you know why? Or we just don't care!
Friday, 16 March 2012
CD Of The Year So Far
Winnie Ho has built up her repertoire well since winning the Astro singing competition many years back. Her resume include two quite brilliant albums under the guise of 2V1G, with master guitarist Roger Wang. I have been waiting for a long time for this to come out since Winnie did a few concerts dubbed as The Jazzy Sounds of Teresa Teng. Those who have been to those concerts know fully well what I am talking about. While Teresa Teng has a very special place in most Chinese music lovers, some of her tunes do sound dated, nothing much she can do about it really.
The simply ingenious music arrangement by Tay Cher Siang basically shone a warm brilliant light on Teresa's songs. Coupled with Winnie's resonating yet layered vocals, we have a wonderful album indeed. You will hear and appreciate Teresa all over again, you will fall in love with both Teresa and Winnie, all over again.
Its always dangerous to do full covers of just one artiste, and one such as Teresa's stature which is numero uno to the max. Fittingly, Cher Siang also composed a song dedicated to Teresa's legacy called Songbird, exquisitely sung by Winnie.
There have been tons of tribute albums of Teresa's songs, and this one is so high up the top of the heap. Just so happens to be fully Malaysian made. HK and Taiwan critics who have heard are surprised and making inquiries to bring the album to HK and Taiwan. Get it before being told by your HK and Taiwanese friends how wonderful this album is (malu-la).
CD Rama (Popular Bookstores) is having their annual musical carnival at 1 Utama, go get Winnie's album at a discounted rate. CD Rama has strongly supported this album by procuring 3,000 copies (mind you, Jay Chou and Eason Chan only sell around 1,500 albums in Malaysia with each release). CD Rama is also having a big sale on the ground floor of the new wing, many wonderful albums going for just RM9.90 ... go see it to believe. Best buy has to be The Police's 3 discs set for RM9.90, which include 2 live concerts CDs and one DVD of their live performance (and I paid RM50 for the same thing 3 weeks back)!!!
The simply ingenious music arrangement by Tay Cher Siang basically shone a warm brilliant light on Teresa's songs. Coupled with Winnie's resonating yet layered vocals, we have a wonderful album indeed. You will hear and appreciate Teresa all over again, you will fall in love with both Teresa and Winnie, all over again.
Its always dangerous to do full covers of just one artiste, and one such as Teresa's stature which is numero uno to the max. Fittingly, Cher Siang also composed a song dedicated to Teresa's legacy called Songbird, exquisitely sung by Winnie.
There have been tons of tribute albums of Teresa's songs, and this one is so high up the top of the heap. Just so happens to be fully Malaysian made. HK and Taiwan critics who have heard are surprised and making inquiries to bring the album to HK and Taiwan. Get it before being told by your HK and Taiwanese friends how wonderful this album is (malu-la).
CD Rama (Popular Bookstores) is having their annual musical carnival at 1 Utama, go get Winnie's album at a discounted rate. CD Rama has strongly supported this album by procuring 3,000 copies (mind you, Jay Chou and Eason Chan only sell around 1,500 albums in Malaysia with each release). CD Rama is also having a big sale on the ground floor of the new wing, many wonderful albums going for just RM9.90 ... go see it to believe. Best buy has to be The Police's 3 discs set for RM9.90, which include 2 live concerts CDs and one DVD of their live performance (and I paid RM50 for the same thing 3 weeks back)!!!
Thursday, 15 March 2012
Smart Fund Raising Move By Khazanah
This is a smart fund raising by Khazanah, well advised by the investment bankers involved. This enabled Khazanah to lock in better than zero rates funding. It is also potentially giving up its stake (i.e. selling around current price) in Parkson Retail. Only when PR moves much higher will bond holders exchange into PR shares, technically at least 5%-7% upside from here before they consider switching. Its a good strategy if you think PR does not present much further upside (more than 20% over the next 2-3 years). Even so, locking in better than zero rates has to be worth something much more, Khazanah would be paying at least 2.5% I think, so thats a $7m savings a year at least.
The other consideration is the USD exposure. Make your own conclusions. Some listed Malaysian companies may want to consider such equity-exchangeable bonds as alternative fund raising - of course if its in the same listed vehicle, then its actually a convertible bond. Some companies hold lesser stakes in other listed vehicles, that may be the way to go. I am thinking about Vincent Tan's Facebook stake, sigh, I think this advice alone is worth RM2m ... somebody write me a cheque!!! If its Facebook, and before listing, I think VT can raise funds at WAAAY below zero rates. Say Facebook is going for an IPO price of $90 a share - VT could issue a bond to raise a similar amount but convertible at $120 over 3 years. This way, you lock in a good selling price, possibly negative rates, maybe -5% for $500m (provided VT has better use to reinvest the $500m of course ... maybe Ananda's power assets, locking in the yields differential). .... OK give me my fees now!!!
FINANCEASIA: Khazanah Nasional last night returned to the equity-linked market with a $358 million exchangeable Islamic bond, which was aggressively priced and confirmed that there is indeed huge investor appetite for deals backed by strong credits. The bonds are exchangeable into Hong Kong-listed Parkson Retail Group and are backed by Khazanah’s remaining 220 million shares in the company – one of the largest nationwide department store operators in China.
The deal attracted more than $1.5 billion of demand and well over 100 investors. It was also priced at best terms for the issuer, including a slight negative yield. This meant it pushed the envelope a bit further than triple-A rated Temasek, which issued two exchangeable bonds in the fourth quarter last year at a zero coupon and zero yield.
The fact that Khazanah is the investment arm of the Malaysian government and therefore viewed as a top-quality issuer was clearly part of the attraction, but the ability to hedge the underlying equity, the lack of equity-linked supply so far this year and continued optimism about the China consumer story all helped draw investors into the deal, sources said. Parkson may no longer be growing at 30% to 40% every year, but it is still viewed as a good story, one source said. However, according to Bloomberg data, 22 of the 28 analysts covering the stock currently have a “hold” recommendation on it. The rest are split evenly between “buy” and “sell”.
This is the first time in four years that Khazanah is tapping the equity-linked market and the fourth time that it sells exchangeable bonds that are compliant with Shar’iah law. The most recent deal, in March 2008, was also exchangeable into Parkson. Indeed, a portion of the shares underlying this latest deal are also underlying the previous bond, of which 55% is still outstanding.
However, the 2008 bonds are well out of the money and are not expected to be exchanged for equity before they mature in March next year. As a result, Khazanah has received approval from Shar’iah scholars to use those same shares to back a new transaction. The 220 million shares account for 7.8% of Parkson’s share capital and at the final terms, the total size of the new exchangeable bond is $357.8 million.
The bonds, or zero periodic payment exchangeable trust certificates as they are called for the purpose of complying with Shar’iah law, have a seven-year maturity, but can be put back to the issuer after three years at a price of 99.25. The long remaining maturity after the put – referred to as a certificate-holder optional dissolution – is a reflection of the fact that interest rates are at record lows right now and Khazanah is taking the opportunity to lock bondholders in for an additional two years at that same rate if they decide not to put the bonds back after three years. The normal practice is to leave only two years after the put, i.e. a five-put-three or seven-put-five maturity. There is also an issuer call after three years, subject to a hurdle of 130%.
The coupon, which on Islamic issues is referred to as a periodic payment, was fixed at zero percent at launch, but the yield was offered in a range between -0.25% and zero percent and the conversion premium came at 25% to 30%. As noted, both were fixed at the issuer friendly end, resulting in a yield of -0.25% and an exchange premium of 30% over Parkson’s closing price of HK$9.71 yesterday. The latter gave an initial exchange price of HK$12.623 – a level that Parkson hasn’t traded above since February 2011.
This is the first non-yen equity-linked deal in Asia with a negative yield since May 2011 when Taiwan’s United Microelectronics Corp sold $500 million of convertible bonds with a yield of -0.25% and a 39% conversion premium.However, that deal was linked to the new Taiwan dollar, although it was settled in US dollars. Looking at dollar-denominated transactions, there hasn’t been any issues with a negative yield since 2009.
The Khazanah bonds traded up to about 101 in the grey market during the two-and-a-half-hour bookbuilding, which boosted investor confidence in the deal even further.
The buyers included a mix of investors, including traditional CB hedge funds and outright investors, but also a lot of cross-over accounts, some credit accounts and some straight equity accounts, one source said. The demand from Islamic investors was lower than on Khazanah’s previous exchangeable sukuk, however, which may partly be due to the fact that they take longer to make investment decisions. Following the real estate crisis in the Gulf region there are also fewer investors looking at asset classes outside of straight bonds, one observer said.
The source estimated the Islamic, or Middle Eastern, demand at about 20% of the total, with Asia accounting for about 50% and Europe the remaining 30%. Khazanah’s latest two Islamic exchangeables – the 2008 deal into Parkson and a 2007 deal into Malaysia-listed Plus Expressways – got about 50% of demand from the Middle East
The latest bonds were marketed at a credit spread of 150bp, a dividend yield of 2% and a stock borrow cost of 50bp. Sources noted that there is plenty of borrow available in the market, but in case it becomes more difficult to access later on, the bookrunners will provide borrow through a stock lending agreement with Khazanah.
At the final terms, this translated into a 92.8% bond floor and an implied volatility of about 27%, which compares with a historic vol of about 35%.
The deal came after two Hong Kong-listed companies tapped the convertible bond market for a combined $434 million on Tuesday, breathing new life into a market that had seen only three deals so far this year. The two issuers –361 Degrees and China Overseas Grand Oceans Group – offered two very different deals in the sense that one of them was viewed as quite expensive (361 Degrees) while the other one was very cheap. Both saw good demand, however, suggesting that investors are happy to use the CB market as a less risky way to gain exposure to Asian equities as the regional markets continue to recover from last year’s slump.
Earlier in the year, CB investors were very cautious about deals that were not hedgeable and said they would prefer to see more paper from high-grade issuers. Khazanah seems to have listened, and its decision to monetise its remaining shares in Parkson a year ahead of the maturity of the initial exchangeable has clearly paid off – if the bonds aren’t exchanged into equity, the company is even getting paid to take investors’ money for at least three years.
Khazanah invested $69 million into Parkson at the time of its Hong Kong IPO in November 2005 and when the Malaysian investment company issued its first exchangeable into the stock it owned about 9.8% of the company. The 2008 exchangeable was sold concurrently with a $96.8 million placement, which reduced Khazanah’s overall stake and left 220 million shares (adjusted for a five-for-one stock split) to back up the $550 million exchangeable.
About 45% of that first bond was put back in March 2011, leaving about 110 million shares still tied up in that exchangeable. The deal is exchangeable into equity at a price of HK$19.45 per share, and given that the stock is currently trading at about half that price it is unlikely that it will ever be converted. However, if the share price were to recover, Khazanah has the option to settle the exchange of both bonds in cash, meaning there is no risk that it will get caught out with too few shares to deliver to investors on either deal.
The exchangeable was jointly arranged by CIMB, Deutsche Bank and J.P. Morgan.
The other consideration is the USD exposure. Make your own conclusions. Some listed Malaysian companies may want to consider such equity-exchangeable bonds as alternative fund raising - of course if its in the same listed vehicle, then its actually a convertible bond. Some companies hold lesser stakes in other listed vehicles, that may be the way to go. I am thinking about Vincent Tan's Facebook stake, sigh, I think this advice alone is worth RM2m ... somebody write me a cheque!!! If its Facebook, and before listing, I think VT can raise funds at WAAAY below zero rates. Say Facebook is going for an IPO price of $90 a share - VT could issue a bond to raise a similar amount but convertible at $120 over 3 years. This way, you lock in a good selling price, possibly negative rates, maybe -5% for $500m (provided VT has better use to reinvest the $500m of course ... maybe Ananda's power assets, locking in the yields differential). .... OK give me my fees now!!!
FINANCEASIA: Khazanah Nasional last night returned to the equity-linked market with a $358 million exchangeable Islamic bond, which was aggressively priced and confirmed that there is indeed huge investor appetite for deals backed by strong credits. The bonds are exchangeable into Hong Kong-listed Parkson Retail Group and are backed by Khazanah’s remaining 220 million shares in the company – one of the largest nationwide department store operators in China.
The deal attracted more than $1.5 billion of demand and well over 100 investors. It was also priced at best terms for the issuer, including a slight negative yield. This meant it pushed the envelope a bit further than triple-A rated Temasek, which issued two exchangeable bonds in the fourth quarter last year at a zero coupon and zero yield.
The fact that Khazanah is the investment arm of the Malaysian government and therefore viewed as a top-quality issuer was clearly part of the attraction, but the ability to hedge the underlying equity, the lack of equity-linked supply so far this year and continued optimism about the China consumer story all helped draw investors into the deal, sources said. Parkson may no longer be growing at 30% to 40% every year, but it is still viewed as a good story, one source said. However, according to Bloomberg data, 22 of the 28 analysts covering the stock currently have a “hold” recommendation on it. The rest are split evenly between “buy” and “sell”.
This is the first time in four years that Khazanah is tapping the equity-linked market and the fourth time that it sells exchangeable bonds that are compliant with Shar’iah law. The most recent deal, in March 2008, was also exchangeable into Parkson. Indeed, a portion of the shares underlying this latest deal are also underlying the previous bond, of which 55% is still outstanding.
However, the 2008 bonds are well out of the money and are not expected to be exchanged for equity before they mature in March next year. As a result, Khazanah has received approval from Shar’iah scholars to use those same shares to back a new transaction. The 220 million shares account for 7.8% of Parkson’s share capital and at the final terms, the total size of the new exchangeable bond is $357.8 million.
The bonds, or zero periodic payment exchangeable trust certificates as they are called for the purpose of complying with Shar’iah law, have a seven-year maturity, but can be put back to the issuer after three years at a price of 99.25. The long remaining maturity after the put – referred to as a certificate-holder optional dissolution – is a reflection of the fact that interest rates are at record lows right now and Khazanah is taking the opportunity to lock bondholders in for an additional two years at that same rate if they decide not to put the bonds back after three years. The normal practice is to leave only two years after the put, i.e. a five-put-three or seven-put-five maturity. There is also an issuer call after three years, subject to a hurdle of 130%.
The coupon, which on Islamic issues is referred to as a periodic payment, was fixed at zero percent at launch, but the yield was offered in a range between -0.25% and zero percent and the conversion premium came at 25% to 30%. As noted, both were fixed at the issuer friendly end, resulting in a yield of -0.25% and an exchange premium of 30% over Parkson’s closing price of HK$9.71 yesterday. The latter gave an initial exchange price of HK$12.623 – a level that Parkson hasn’t traded above since February 2011.
This is the first non-yen equity-linked deal in Asia with a negative yield since May 2011 when Taiwan’s United Microelectronics Corp sold $500 million of convertible bonds with a yield of -0.25% and a 39% conversion premium.However, that deal was linked to the new Taiwan dollar, although it was settled in US dollars. Looking at dollar-denominated transactions, there hasn’t been any issues with a negative yield since 2009.
The Khazanah bonds traded up to about 101 in the grey market during the two-and-a-half-hour bookbuilding, which boosted investor confidence in the deal even further.
The buyers included a mix of investors, including traditional CB hedge funds and outright investors, but also a lot of cross-over accounts, some credit accounts and some straight equity accounts, one source said. The demand from Islamic investors was lower than on Khazanah’s previous exchangeable sukuk, however, which may partly be due to the fact that they take longer to make investment decisions. Following the real estate crisis in the Gulf region there are also fewer investors looking at asset classes outside of straight bonds, one observer said.
The source estimated the Islamic, or Middle Eastern, demand at about 20% of the total, with Asia accounting for about 50% and Europe the remaining 30%. Khazanah’s latest two Islamic exchangeables – the 2008 deal into Parkson and a 2007 deal into Malaysia-listed Plus Expressways – got about 50% of demand from the Middle East
The latest bonds were marketed at a credit spread of 150bp, a dividend yield of 2% and a stock borrow cost of 50bp. Sources noted that there is plenty of borrow available in the market, but in case it becomes more difficult to access later on, the bookrunners will provide borrow through a stock lending agreement with Khazanah.
At the final terms, this translated into a 92.8% bond floor and an implied volatility of about 27%, which compares with a historic vol of about 35%.
The deal came after two Hong Kong-listed companies tapped the convertible bond market for a combined $434 million on Tuesday, breathing new life into a market that had seen only three deals so far this year. The two issuers –361 Degrees and China Overseas Grand Oceans Group – offered two very different deals in the sense that one of them was viewed as quite expensive (361 Degrees) while the other one was very cheap. Both saw good demand, however, suggesting that investors are happy to use the CB market as a less risky way to gain exposure to Asian equities as the regional markets continue to recover from last year’s slump.
Earlier in the year, CB investors were very cautious about deals that were not hedgeable and said they would prefer to see more paper from high-grade issuers. Khazanah seems to have listened, and its decision to monetise its remaining shares in Parkson a year ahead of the maturity of the initial exchangeable has clearly paid off – if the bonds aren’t exchanged into equity, the company is even getting paid to take investors’ money for at least three years.
Khazanah invested $69 million into Parkson at the time of its Hong Kong IPO in November 2005 and when the Malaysian investment company issued its first exchangeable into the stock it owned about 9.8% of the company. The 2008 exchangeable was sold concurrently with a $96.8 million placement, which reduced Khazanah’s overall stake and left 220 million shares (adjusted for a five-for-one stock split) to back up the $550 million exchangeable.
About 45% of that first bond was put back in March 2011, leaving about 110 million shares still tied up in that exchangeable. The deal is exchangeable into equity at a price of HK$19.45 per share, and given that the stock is currently trading at about half that price it is unlikely that it will ever be converted. However, if the share price were to recover, Khazanah has the option to settle the exchange of both bonds in cash, meaning there is no risk that it will get caught out with too few shares to deliver to investors on either deal.
The exchangeable was jointly arranged by CIMB, Deutsche Bank and J.P. Morgan.
Monday, 12 March 2012
Who Is Yu Heng?
Well, for once my banner has eclipsed my "Malaysia Finance" tag line, and for good reason, the poster is for promoting a showcase concert for a true blue Malaysian singer songwriter, Yu Heng (pronounced as "Yue Herng"). If you have not heard of her, well, take it from me, you are looking at a future superstar. Earlier in her career, she was under a Taiwan label, but sadly was mis-managed and had to spend two years in Beijing doing nothing, but she confessed that she did write a lot of songs during her enforced period in Beijing.
Her songwriting ability is exceptional, in fact she has written hit songs for many, including Liang Jing Ru (Fish Leong). After the debacle with her previous label, she had to do it all again from afresh, starting her own production company, her own label.
If you talk about Malaysian singers who have made it big in Taiwan, there is Kuan Liang, Ping Kuan, Fish Leong, Penny Tai... to name a few .. seriously, I think Yu Heng is more talented than most of them. Her songwriting skills is the thing that will eventually allow her to shine. I sincerely believe she will find greater recognition than Tanya Chua and maybe on par with Stefanie Sun. Her voice is solid.
Funny thing is that though she is a very lovely looking girl but never wants to promote her career through her looks. Look at her concert poster! Just have a listen to her songs from her latest album from the links below and be blown away.
http://www.reverbnation.com/iyuheng
http://www.facebook.com/iyuheng/app_2405167945
OMG, each and every original song is sooo solidly goood ...
Armed with that new album and her barrage of new songs in her inventory for the future, how not to succeed. This showcase will be her last in Malaysia for a while as she will be leaving to live in Taiwan for a long while to chart her career. I don't even need to wish her success cause I know she will be very famous, not just a pretty face.
Do I write as if I know her? Yes, I do know her, and I am so lucky to know her before she is really famous... hope she remembers me later when she makes it.
售票詳情：
日期：24/03/2012 (六)
时间：8.00pm-10.00pm
地点：Celebrities Hall of Music (Suite L-6-3A, SohoKL, Solaris Mont Kiara)
门票：预售票每张RM 50 (含1杯指定饮料) / 现场票每张RM 60 (不含饮料)
*凭票入场、自由入席；先到先得、售完为止* 询问热线：28Stage(03-92850282)
A)购买【预售票】方式：
凡是想要购买『爱一个人，还是唱一首歌？』宇珩 ‘s LIVE 预售票的朋友，可在2月28日开始透过28Stage订购。只需以下3个简单的步骤，所以你还等什么呢？]
I. 请将欲订购的入场卷总额 (1张RM50, 2张RM100, 以此类推) 存入以下的银行户口：
银行名称： Malayan Banking Berhad (Maybank)
户口名称： 28Stage Sdn. Bhd.
户口号码： 5145 4311 7442
II. 请 将汇款单据 (Bank In Slip) 或网络转账页面 (Online Transfer Page Print Screen) ，连同你的个人资料（英文姓名、身份证号码&联络电话）电邮到 28Stage 的信箱 28stage@gmail.com，抬头请注明 ［订购：『爱一个人，还是唱一首歌？』宇珩 ‘s LIVE ］
III. 28Stage 负责人在收到电邮后，将以电邮回复并提供 门票编号，当天凭身份证既能领取已订购的入场卷。
B)购买【现场票】方式：
于3月24日当天7pm前往入口处的柜台购买。门票有限，售完为止。
Her songwriting ability is exceptional, in fact she has written hit songs for many, including Liang Jing Ru (Fish Leong). After the debacle with her previous label, she had to do it all again from afresh, starting her own production company, her own label.
If you talk about Malaysian singers who have made it big in Taiwan, there is Kuan Liang, Ping Kuan, Fish Leong, Penny Tai... to name a few .. seriously, I think Yu Heng is more talented than most of them. Her songwriting skills is the thing that will eventually allow her to shine. I sincerely believe she will find greater recognition than Tanya Chua and maybe on par with Stefanie Sun. Her voice is solid.
Funny thing is that though she is a very lovely looking girl but never wants to promote her career through her looks. Look at her concert poster! Just have a listen to her songs from her latest album from the links below and be blown away.
http://www.reverbnation.com/iyuheng
http://www.facebook.com/iyuheng/app_2405167945
OMG, each and every original song is sooo solidly goood ...
Armed with that new album and her barrage of new songs in her inventory for the future, how not to succeed. This showcase will be her last in Malaysia for a while as she will be leaving to live in Taiwan for a long while to chart her career. I don't even need to wish her success cause I know she will be very famous, not just a pretty face.
Do I write as if I know her? Yes, I do know her, and I am so lucky to know her before she is really famous... hope she remembers me later when she makes it.
售票詳情：
日期：24/03/2012 (六)
时间：8.00pm-10.00pm
地点：Celebrities Hall of Music (Suite L-6-3A, SohoKL, Solaris Mont Kiara)
门票：预售票每张RM 50 (含1杯指定饮料) / 现场票每张RM 60 (不含饮料)
*凭票入场、自由入席；先到先得、售完为止* 询问热线：28Stage(03-92850282)
A)购买【预售票】方式：
凡是想要购买『爱一个人，还是唱一首歌？』宇珩 ‘s LIVE 预售票的朋友，可在2月28日开始透过28Stage订购。只需以下3个简单的步骤，所以你还等什么呢？]
I. 请将欲订购的入场卷总额 (1张RM50, 2张RM100, 以此类推) 存入以下的银行户口：
银行名称： Malayan Banking Berhad (Maybank)
户口名称： 28Stage Sdn. Bhd.
户口号码： 5145 4311 7442
II. 请 将汇款单据 (Bank In Slip) 或网络转账页面 (Online Transfer Page Print Screen) ，连同你的个人资料（英文姓名、身份证号码&联络电话）电邮到 28Stage 的信箱 28stage@gmail.com，抬头请注明 ［订购：『爱一个人，还是唱一首歌？』宇珩 ‘s LIVE ］
III. 28Stage 负责人在收到电邮后，将以电邮回复并提供 门票编号，当天凭身份证既能领取已订购的入场卷。
B)购买【现场票】方式：
于3月24日当天7pm前往入口处的柜台购买。门票有限，售完为止。
Sunday, 11 March 2012
Let's Move Our Country!!?? - Kiribati
Kiribati, possibly one of the loveliest place for scuba diving, is under serious threat. So much so, they may have to move the country!!!
Read more: http://www.smh.com.au/environment/threatened-pacific-nations-escape-plan-is--fiji-20120310-1uquy.html#ixzz1oiJbhRNv
Fears that climate change could wipe out the entire Pacific archipelago of Kiribati. Photo: AP
Fearing climate change could wipe out their entire Pacific archipelago, the leaders of Kiribati are considering an unusual backup plan: moving the populace to Fiji. Kiribati President Anote Tong said yesterday that his Cabinet this week endorsed a plan to buy almost 3000 hectares on Fiji's main island, Viti Levu. He said the fertile land, being sold by a church group for about $9.6 million, could be insurance for Kiribati's entire population of 103,000, though he hopes it will never be necessary for everyone to leave.
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Sea water washes across the foreshores of climate change threatened Kiribatui.
"We would hope not to put everyone on one piece of land, but if it became absolutely necessary, yes, we could do it," Tong said. "It wouldn't be for me, personally, but would apply more to a younger generation. For them, moving won't be a matter of choice. It's basically going to be a matter of survival."
Kiribati, which straddles the equator near the international date line, has found itself at the leading edge of the debate on climate change because many of its atolls rise just a few feet above sea level.
Tong said that some villages have already moved, and that there have been increasing instances of sea water contaminating the island's underground fresh water, which remains vital for trees and crops. He said changing rainfall, tidal and storm patterns pose as least as much threat as ocean levels, which so far have risen only slightly.
Some scientists have estimated the current level of sea rise in the Pacific at about 0.1 inch (2 millimetres) per year. Many scientists expect that rate to accelerate due to climate change. Fiji, home to about 850,000 people, is around 2,250 kilometres south of Kiribati.
But just what people there think about potentially providing a home for thousands of their neighbours remains unclear. Tong said he's awaiting full parliamentary approval for the land purchase, which he expects in April, before discussing the plan formally with Fijian officials.
Sharon Smith-Johns, a spokeswoman for the Fijian government, said that several agencies are studying Kiribati's plans, and that the government will release a formal statement next week. Kiribati, which was known as the Gilbert Islands when it was a British colony, has been an independent nation since 1979.
Tong has been considering other unusual options to combat climate change, including shoring up some Kiribati islands with sea walls and even building a floating island. He said this week that the latter option would likely prove too expensive, but that he hopes reinforcing some islands will ensure that Kiribati continues to exist in some form even in a worst-case scenario.
"We're trying to secure the future of our people," he said. "The international community needs to be addressing this problem more."
Tong said he hopes that the Fiji land will represent just one of several options for relocating people. He pointed out that the land is three times larger than the atoll of Tarawa, currently home to more than half of Kiribati's population.
Like much of the Pacific, Kiribati is poor - its annual GDP per person is just $1,600 - but Tong said the country has plenty of foreign reserves to draw from for the land purchase. The money, he said, comes from phosphate mining on the archipelago in the 1970s.
Read more: http://www.smh.com.au/environment/threatened-pacific-nations-escape-plan-is--fiji-20120310-1uquy.html#ixzz1oiJbhRNv
Thursday, 8 March 2012
Calvin & Hobbes On Some Companies
Some of you should have come across this cartoon before. It was originally meant for the US auto industry and its subsequent bailout. Heck, could this also portray MAS, AIG, Indah Water, Konsortium Perkapalan, PSC, etc...
(click on cartoon to enlarge)
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Saturday, 3 March 2012
RBS signs MOU with CIMB to sell part of Asia-Pacific business
CIMB continues to make the right moves to expand across the region.
FINANCE ASIA:
The potential sale will include the UK bank's cash equities, ECM, M&A and corporate finance divisions in Asia and Australia.
After six weeks of trying to find a buyer for parts of its Asia-Pacific business, Royal Bank of Scotland yesterday signed a memorandum of understanding with Malaysia’s CIMB Group. The aim is to finalise a sale and purchase agreement during the next few weeks that will cover the cash equities, equity capital markets, M&A and corporate finance divisions in Asia-Pacific, including Australia, a source said.
The MOU was confirmed by CIMB and RBS in separate statements, but neither party provided any further details. CIMB said the MOU will allow it to negotiate exclusively with RBS to finalise the scope and terms of a sale.
There has been no information about what price CIMB may be paying or what kind of arrangement it is prepared to offer for the existing employees in these businesses, but the MOU suggests that RBS feels there is more value in selling these businesses than to close them down — which is what it has decided to do with these same divisions in Europe.
The main reason for the restructuring of RBS’s wholesale business and the decision to exit the cash equities, ECM and corporate finance businesses globally is clearly a need to cut costs and the management is believed to have come under a lot of pressure from the UK government, which owns 82% of the bank, to get this done quickly.
However, for the people negotiating a potential sale in Asia-Pacific, a key driver has been to enable a large portion of its employees to continue their work under a new roof. One source said that the businesses covered by the MOU employ about 600 people and at the moment the intention is for CIMB to buy the business with the employees. However, it is unlikely that it will end up keeping them all.
For CIMB, the most interesting part of RBS will be its businesses in North Asia and Australia, where the Malaysian bank has a limited presence but is keen to expand as it pushes ahead with its plans to become a regional investment bank. On the other hand, there is bound to be quite a bit of overlap with CIMB’s existing businesses in Southeast Asia and one can expect more job losses among the current RBS staff there.
Overall though, sources argue that the RBS business is a good fit for CIMB and one person noted that the two businesses combined would have ranked in the top 10 in ECM activity across Asia-Pacific last year and close to, if not inside, the top 10 in the brokerage of cash equities.
As with any merger, CIMB will have to work to realise the value of the business, but, assuming it does happen, the acquisition will give it the building blocks to become a competitive force in an Asia-Pacific context.
The MOU comes after RBS announced in mid-January that it would reorganise its wholesale business and close or sell its cash equities, mergers advisory, corporate broking and ECM operations in Europe, the Middle East and Africa, and Asia-Pacific as part of a plan to cut 3,500 investment banking jobs across the globe in the next three years.
Initially, the bank was hoping to find one buyer for the entire business across the three regions and sources said there were some potential buyers looking at that. However, quite quickly it became clear that the best option to find interested buyers would be to sell different regions separately.
On February 1, the bank announced that it had agreed to sell its RBS Hoare Govett corporate broking operations in the UK to Jefferies for a nominal cash consideration. The agreement also includes the transfer of “certain other cash equities professionals” to Jefferies. The sale is expected to complete by the end of the first quarter.
However, on February 11 — less than one month after the initial exit announcement — it told staff that it had decided to wind down parts of its ECM and cash equities business focusing on Europe, the Middle East and Africa (Emea) after failing to find a buyer. The closures will affect 200 to 300 employees and, if nothing else, they show the pressure the bank is under to get out of these businesses.
Aside from CIMB, there were a number of other interested parties for the Asia-Pacific businesses, including China International Capital Corp (CICC), but the Malaysian bank appears to have gained the advantage because of its ability to move quickly. Lazard is advising RBS on the sale.
As reported earlier, RBS is creating a new wholesale banking division out of its remaining businesses, called markets and international banking. The new division will incorporate debt capital markets and the financial institutions group, as well as the banking business that is currently part of global banking and markets (GBM) and the international arm of global transaction services (GTS), and will be led by John Hourican.
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