ALLIANCE Merchant Bank Bhd is headed for a listing on the main board of Bursa Malaysia some time at the end of this year or early next year.
In doing so, it will join the ranks of listed investment banks such as Commerce International Merchant Bankers Bhd (CIMB) and ECM Libra Bhd. AmMerchant Bank Bhd has put in its proposal for listing which is slated for year-end.
CIMB and AmMerchant are already large dealmakers and successful investment banks while ECM Libra is an upcoming player. Together with Aseambankers and RHB Sakura, they garner a large share of the market.
However, a new and ambitious player, Alliance Merchant, is emerging and looks set to make its mark in the investment banking scene.
In a statement yesterday, Alliance Merchant’s parent, Malaysian Plantations Bhd (MPlant), said its board of directors had decided at a meeting earlier in the day to list the bank.
Alliance Merchant, a wholly-owned subsidiary of MPlant, has also strengthened its presence in the investment banking scene with its RM273mil purchase of KL City Securities and its subsidiaries.
Moving forward as a full-fledged investment banking group, the listed Alliance Merchant will be able to tap into the equity market for its future expansion and continued growth.
It can also position itself as a premier investment banking group in Malaysia in line with the corporate objectives of the MPlant group.
“The intended listing is also expected to unlock value within the MPlant group by increasing its net tangible assets and thereby enhancing shareholders' value,’’ MPlant said in a statement to Bursa Malaysia.
CIMB was the first investment house to be listed on Bursa Malaysia followed by ECM Libra via a backdoor listing of South Pacific Industries Bhd. AmMerchant is proposing a listing following a major restructuring exercise within the AMMB group.
Alliance Merchant may be viewed as the smallest of the four but it certainly has big ambitions. Sources do not rule out the entry of a foreign party at the group bank level as such a move would allow it to strengthen its overall position in the market place.
This is in line with the trend towards financial liberalisation and local banks' preparation in terms of capacity and capability building.
Fund managers also observe that getting a listing would help Alliance Merchant in its marketing drive and improve its prestige as clients normally place confidence in factors such as size and listed status.
Senior industry players point out that although some high-ranking professionals had left Alliance Merchant in the past, the recent financial results of the Alliance banking group showed that the investment banking business had not been severely impacted.
“A new team is in place under the leadership of acting CEO Foo Kok Siew, and they have been aggressively marketing the investment bank's services. Some good progress has been made,'' he said.
With the synergies derived from its acquisition of KLCS units, he foresees the investment bank undertaking initial public offerings, placements of equities, and even issue of debt papers in the near future.
On competition, he said: “There is room for other players and Alliance Merchant is just rising to the challenge to take a rightful share of the market. The team feels that listing is timely and wants to give it a shot,'' he said.
Another industry player, however, expressed surprise that MPlant was making this decision to list its investment bank while a major corporate move, that is, Singapore’s Temasek Holdings negotiations for a stake in MPlant, was still going on.
StarBiz had reported earlier that certain shareholders of MPlant were not very happy with the price offered, of around RM2.60 per share, and felt that the company was worth more. They had cited the possible listing of Alliance Merchant as among the factors.
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