Issue 31

Malaysia’s RHB Bank gets nod to sell up to 94.7% to Tokio Marine Asia

RHB Bank, Malaysia’s fourth-biggest lender, said on Wednesday it had received permission from the country’s central bank to start talks to sell up to 94.7% of its shares in its general insurance arm to Tokio Marine Asia Pte Ltd. 

The announcement comes months after Tokio Marine Holdings Inc, one of Japan’s largest property and casualty insurers by market value, said it would actively pursue deals overseas to further diversify its geographic footprint. RHB Bank said a deal is subject to Ministry of Finance and central bank approval. 

Reuters reported in 2016 that Tokio Marine, which already runs its own life and general insurance businesses in Southeast Asia’s third-biggest economy, could buy out RHB Insurance for as much as $500 million. RHB Insurance had total assets of 1.78 billion ringgit ($431.52 million) and liabilities of 1.2 billion ringgit as of last year. 

It is the 10th largest insurer in Malaysia with a 4.4% market share, according to RHB Bank’s 2018 annual report. It said the insurance business’s gross written premium – amount customers are required to pay for insurance coverage – rose 14% to 787 million ringgit ($190.79 million) last year, compared with the industry’s growth rate of 1.5%.


From – Deal Street Asia


Malaysia’s FGV Holdings in early talks to pare stake in MSM

Malaysia’s agricultural and agri-commodities company FGV Holdings Bhd is reportedly in early-stage of discussions to reduce part of its 51 per cent stake in refined sugar producer MSM Malaysia Holdings. 

FGV is said to be exploring potential collaborations including strategic alliances with international players in the sugar industry, both in the upstream and downstream businesses, per a report in The Edge Market. Currently, FGV holds 51% stake in MSM Malaysia. Following the disposal, FGV and the acquirer may hold the same shareholding in MSM. 

FGV has conducted discussions with at least four companies who are keen to acquire the block of shares, as cited by The Edge Markets report. One of the interested parties is JAG Capital Sdn Bhd, an investment holding company linked to the family of former second finance minister Datuk Seri Johari Abdul Ghani. FGV is also in talks with international players including Singapore-based Wilmar International, owned by Kuok Group. 

It is also in talks with an unnamed Indonesian firm and a Chinese company. Earlier, FGV had mentioned about the company’s three-year transformation plan to rationalise and to divest its non-performing businesses and focus on maximising returns from performing businesses. Recently, FGV sold 100% of FGV China Oils Ltd (FGVCO) for 100 million ringgit to Grand Industrial Holdings. 

In 2010, FGV acquired MSM stake from local company PPB Group Bhd for 1.22 billion ringgit. PPB Group is backed by the Malaysia’s tycoon Robert Kuok, who exited the sugar business along with the sale of MSM’s stake. MSM is the dominant player in Malaysia’s domestic sugar industry, along with Central Sugars Refinery Sdn Bhd, which heavily rely on the import of raw sugar. 

The outlook of Malaysia’s sugar industry is expected to be more challenging due to the possibility of rising competition from imported sugar, which was allowed by the government since early last month.

From – Deal Street Asia

Malaysia, Philippines sign MoU to collaborate on healthcare

Malaysia and the Philippines have agreed to collaborate in various areas of healthcare through the signing of the memorandum of understanding (MoU), here, today. 

The Heath Ministry in a statement said the MoU was signed by Malaysian Health Minister, Datuk Seri Dr Dzulkefly Ahmad and the Philippines Department of Health Secretary, Dr Francisco T. Duque III, during a bilateral meeting in Putrajaya to discuss strengthening both countries’ bilateral ties through collaboration on healthcare. 

Under the MOU, both Malaysia and the Philippines agreed to cooperate in the areas of primary healthcare; reproductive health; health education; human resources for health development; nutrition and exchange of information on issues related to food safety and quality, including but not limited to rapid alert systems related to imported products. 

Both countries will also collaborate on the prevention and control of communicable and non-communicable diseases; regulatory control of pharmaceuticals; traditional medicines, herbal medicine, health supplements and cosmetic products; medical devices; health tourism; health research; and healthcare services. 

A Joint Technical Working Group led by designated officials from the health ministries of both countries will implement the MOU. 

"Both health ministers emphasised the importance of advancing collaboration to address cross-border health concerns amid the rapidly changing global environment. 

"Cooperation between neighbouring countries is crucial to rapidly respond to public health threats and prevent greater health risks including epidemics and microbial resistance, among others," they said in a joint statement, here, today. 

The two health ministers also expressed hope that the outcome of the meeting would further strengthen ties and cooperation between both countries in the management of cross-border issues relating to health and across various stakeholders.

From – Bernama

Alibaba offshoot MYbank seeks to secure $871m in first fundraising

China’s MYbank, an offshoot of Alibaba Group Holding Ltd, seeks to raise about 6 billion yuan ($871 million) in its maiden fundraising, valuing the online lender at 24 billion yuan, according to a source and a fundraising document seen by Reuters. 

MYbank, backed by Alibaba affiliate Ant Financial Services Group and Chinese conglomerate Fosun International Ltd , plans to use the proceeds to boost its capital base and support lending to small businesses, said the person with direct knowledge of the matter. 

Its capital adequacy ratio was 12.1% at the end of 2018 from 13.51% a year prior, its 2018 annual report showed. Chinese regulation dictates small, non-systematically important banks are subject to a minimum capital adequacy ratio of 10.5%. Several existing shareholders including Ant and Fosun are looking to participate in the latest fundraising, said the person who declined to be identified as the information was not public. 

MYbank, Ant and Fosun declined to comment. Bloomberg first reported MYbank’s fundraising plans on Monday. China’s internet companies in recent years have increasingly encroached on areas served by traditional banks as the government encourages change in its stodgy and largely state-owned finance industry. 

Launched in June 2015, MYbank is one of a handful of online lenders – along with Tencent Holdings Ltd’s WeBank – founded entirely with private investment. MYbank has been seeking to expand its network to include more small businesses under-served by long-established financial institutions. Funding for such borrowers has traditionally been scarce as they have little to no collateral. 

The bank had served 12.27 million small firms and private business owners, with an average outstanding loan of 26,000 yuan as at the end of last year, its annual report showed. It recorded net profit of 670 million yuan and revenue of 6.28 billion yuan. 

Ahead of the fundraising, MYbank is 30% owned by Ant Financial which along with Alibaba has provided the lender with cloud-computing expertise and helped it with big data, artificial intelligence and facial recognition to facilitate lending, MYbank president has told Reuters. Units of Fosun and auto parts supplier Wanxiang Group own 25% and 18% respectively.

From – Deal Street Asia

BlackRock collects $2b for global credit opportunities fund

BlackRock Inc, the world’s largest asset management firm, said on Wednesday it had raised $2 billion for its flagship opportunistic credit fund, Global Credit Opportunities, reflecting investor demand for alternative investments. 

The fund will invest in corporate credit assets across geographies and industries, and seek value throughout the credit cycle, according to BlackRock, which had $6.84 trillion in assets under management as of June. Global Credit Opportunities’ fundraising builds on BlackRock’s broader push in establishing a global private credit franchise. 

In addition to opportunistic credit, over the last few years, BlackRock has expanded its private credit capabilities in Asian private credit, special situations, and U.S. and European middle market credit, including the acquisition of Tennenbaum Capital Partners in 2018. 

BlackRock’s Global Credit platform manages $100 billion in total client assets, and seeks to generate income and capital growth by targeting less liquid opportunistic, stressed and special situations investments. According to BlackRock’s 2019 Global Institutional Rebalancing Survey, 56% of global respondents planned to increase their allocations to private credit. 

“Investors looking for attractive risk-adjusted returns and portfolio diversification are increasingly looking to credit, where scale and expertise can help generate alpha,” said Tim O’Hara, global co-head of credit. 

“Building out our opportunistic credit strategy to take advantage of secular trends and cyclical dislocations in the credit markets is a natural evolution of our platform as we continue to bolster a credit business that can deliver for clients across risk spectrums and market cycles,” he said.

From – Deal Street Asia
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