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CIMB ASEAN CONFERENCE 2012
Wednesday 13/06/2012
Opening Remarks
Dato’ Sri Nazir Razak, Group Chief Executive, CIMB Group
13 June 2012
Mandarin Oriental Kuala Lumpur
Ladies and Gentlemen,
It gives me great pleasure to welcome you to the 2nd CIMB ASEAN Conference. We have built on the fantastic experience of our inaugural conference in October last year, and requests received from some of you, to put together a bigger and better gathering for ASEAN companies, investors and thought leaders.
In actual fact, in this room I believe we have the biggest ever gathering of large ASEAN corporates in Kuala Lumpur. We welcome 32 large corporates – 10 from Malaysia, 6 from Singapore, 4 from Indonesia, 4 from Thailand and 8 collectively from the Philippines, Vietnam, Hong Kong and Australia.
At last year’s plenary sessions we talked about ASEAN’s potential, and the aspirations and roles of its corporate constituents. This year we drill down a little deeper into what’s missing from the ASEAN equation. What does ASEAN need to do to elevate itself as a distinct asset class in the eyes of global investors? And what are the key shortcomings, and remaining hurdles to the ASEAN Economic Community 2015? Over the next 2 days, we also feature breakout sessions on ASEAN economies, including the exciting new frontier of Myanmar and key related APAC economies, namely China and Australia.
Ladies and Gentlemen,
A lot has happened since we met last year – CIMB has changed for the better and the global operating environment has changed for the worse.
On the CIMB front, we have taken advantage of the global situation and made two significant purchases; the acquisition of the Asia Pacific IB and equities operations of RBS, and the purchase of a majority share in the Philippines Bank of Commerce (subject to regulatory approval).
With the RBS acquisition, we have transformed CIMB Investment Bank into the largest Asia Pacific based investment bank. Our new or enlarged units in India, Australia, Greater China, the US and the UK will enable us to assist investors and businesses who want to move in and out of ASEAN or across Asia Pacific as a whole. When the deal reaches completion later this year, our total institutional sales force will increase from 36 to 60; and our research staff force will go from 61 to 112, covering over 1,200 stocks across Asia Pacific. We have acquired scale in APAC ex-ASEAN and at the same time, strengthened our credentials and capabilities within ASEAN too.
After our second purchase, Bank of Commerce, we will have full universal banking capabilities in all five of the large ASEAN economies, namely Malaysia, Indonesia, Thailand, Singapore and the Philippines.
As I see it, CIMB took advantage of the global crisis to complete the platform we need to achieve our Vision 2015, which we announced publicly back in 2007. And in doing so, we have strengthened our ability to leverage on the Asian Century. This has placed us alongside many corporates who are here at this conference – San Miguel, Sime Darby, SP Setia, SapuraKencana Petroleum – ASEAN companies who have made similar tactical moves recently.
Ladies and gentlemen,
Taking advantage of the crisis doesn't make us any less anxious about what lies ahead. We are in the midst of a simultaneous global banking, financial markets and economic crisis that, in the last few months, has taken on dangerous socio-political dimensions in Europe with high unemployment, rapid changes in governments and growing diplomatic tensions at the international level.
The political paralysis in Europe and the US, to a lesser extent, means that it will probably take a severe trigger event before decisive steps are taken to distribute all the pain that has to be suffered and to begin the recovery process. Until then, strategies to contain the crisis are set to prolong uncertainty for financial markets, deny banks the economic environment they need breathe properly again and restrain economic activity.
Even closer to home, there are concerns over the two Asian giants of China and India, with growth slowing in China and a potential foreign exchange crisis bubbling in India.
Ladies and Gentlemen,
Against this bleak backdrop, the ASEAN region shines brightly. But can our region find new levers for growth in the face of stalling external demand? Yes we can, but we need to make concerted efforts to increase intra-ASEAN activity. In detail, we must work in three major areas –
1. We must vigorously grow trade by pursuing free trade agreements, whether individually or as ASEAN, and by bringing down barriers, especially non-trade barriers within ASEAN.
2. We must capitalise on our demographic dividend. We are blessed with a young population that is urbanizing rapidly. The key bottleneck in tapping this is infrastructure, particularly in logistics and connectivity. If our relevance lies in being the crossroads of Asia, the meeting place and connector, we must make sure our connectivity infrastructure is up to the task, and our cities are capable of absorbing and channeling the productive energies of millions of new entrants every year into the global workforce. According to an ADB estimate, ASEAN countries will need to invest approximately $60 billion per year in roads, railways, ports, energy, water and sanitation and other infrastructure.
3: And relatedly, we must work to unblock the key bottleneck to building this infrastructure, which is not the availability of financing but financial intermediation. We lack the finance infrastructure to optimise our region’s high savings levels. Our financial markets are not deep enough or integrated enough to fund these large infrastructure projects, even though we have large reserves. The countries of ASEAN have already applied the hard lessons learned from the 1997 Asian financial crisis to ensure relative stability in our individual economies in the midst of this volatile global economy. The challenge now is to start acting as one region, to evolve policy coordination into a common framework for managing and growing a regional economy. In particular, I would like to see agreement on an ASEAN banking framework, the creation of a single ASEAN stock exchange and greater regional collaboration to strengthen domestic currency bond markets.
Ladies and Gentlemen,
The CIMB ASEAN Conference 2012 lays before you an array of interesting companies and various discussion topics around investing in this region, today’s investment oasis it seems. But now, more than ever, investment decisions cannot be made without an understanding of global mega trends. To help us immeasurably in that task, we have two very special and highly qualified keynote speakers for you.
Tomorrow, Toyoo Gyohten, who has had a long and illustrious career in academia, government and the corporate sector, will address us. He was formerly Japan’s Vice-Minister of Finance and Chairman of Bank of Tokyo. Gyohten-san is presently President of the Institute for International Monetary Affairs and Special Advisor to the Minister of Finance of Japan.
For today, our keynote speaker is none other than Prof. Kishore Mahbubani, Dean of the Lee Kuan Yew School of Public Policy at the National University of Singapore. Kishore’s massively impressive CV includes serving as Singapore’s Ambassador to the United Nations where he also sat on the UN Security Council, during the 9/11 attacks. Kishore is a man of prodigious talents – an entertaining speaker, a master debater and a critically acclaimed author. He has been described as “the muse of the Asian Century” by Foreign Policy magazine, for his deeply insightful but often contrarian views on East-West dynamics. I personally share his unyielding optimism for Asia, and I admit that I shamelessly paraphrase his writings from time to time.
Enjoy the conference and please join me in welcoming Prof. Kishore Mahubani.
SOURCE : CIMB Group
--BERNAMA
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