Khazanah will likely trim stakes in CIMB Group Holdings, chaired by the brother of former Premier Datuk Seri Najib Tun Razak, regional telecoms firm Axiata Group and restructure struggling Telekom Malaysia in the coming months, the sources told Reuters.
KUALA LUMPUR: Kenanga research expects CIMB Group
Holdings Bhd to make further inroads into Asean given its plans for strategic growth in the region.
CIMB's FORWARD 23 strategy entails the group strengthening its presence in the fast-changing banking landscape, embracing the industrial Revolution 4.0 and competing/embracing the disrupters' challenge, the research house said in a note.
It is positive on the group's foray despite practising caution on the aggressive expansion due to trade friction and uncertainties.
However, it is especially positive on its digital banking push in the Philippines, which it says will lower cost, build customer base and enhance its experience into the digital economy.
Meanwile, CIMB has the dominant and competitive advantage in Malaysia and Singapore and will pursue a niche and selective strategy in Singapore and Thailand, it said.
CIMB is being cautious in Vietnam due to its competitive and regulatory environment.
"We understand that the group is competing in the market in a measured way, reassessing constantly for the right opportunity and we won’t be surprised if the same Philippines strategy is adopted when regulatory condition is eased.
"We also do not discount that given the right price, potential M&A would emerge," it said.
For the Indonesian market, Kenanga expects CIMB to look for growth opportunities in the consumer and retail SME segment while vigorously expanding its digital banking.
"Riding the expected infra spending in Indonesia, it is expecting the corporate segment will be widened, and is pursuing this segment competitively given that its cost of funds has significantly dropped by 2ppt with CASA contributing 55% to funding," it said.
The Indonesian market is expected to grow its contribution from about 20% to about 30% by the end of FORWARD 23 while Singapore's and Thailand's markets are expected to maintain their contributions at about 7%
Kenanga said CIMB Thailand may focus on asset quality, high-end consumers and emphasise on corporate entities, which are MNC with a presence in Asean.
The research house maintained its outperform call on the group with an unchanged target price of RM6.25
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