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March 18, 2014
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SEE PAGE 15 FOR IMPORTANTDISCLOSURES AND ANALYST CERTIFICATIONS PP16832/01/2013 (031128)
MY Banking Sector NEUTRAL (unchanged)
Mudarabah: Deposit or investment? Latest EDs could raise operating costs for Islamic banks.
But we expect a muted impact (<1%) to financial groups -
Islamic operations account for just 9-16% of group earnings.
Impact on BIMB’s pretax profit (estd -4%) could be less than
earlier estimated. Maintain HOLD for now.
What’s New
Bank Negara had earlier issued various Islamic banking exposure
drafts and a guideline on investment accounts. The more relevant
one pertains to the treatment of Mudarabah accounts as
“investments” rather than “deposits”. Discussions are ongoing
between Bank Negara and the Islamic banks on possible routes to
take and there are still various issues to be ironed out.
What’s Our View
Some consequences of compliance could include (i) a slight
reduction in balance sheet size if restricted investment accounts
are taken off-balance sheet, (ii) higher operating costs if bankers
switch to Commodity Murabahah, and (iii) opportunity costs if
depositors decide to opt for conventional banks instead.
The financial impact will vary from bank to bank depending on the
strategy they adopt and the frequency of deposit churn. Based on
very general parameters, however, we guesstimate that the
additional transaction costs would average just about 5% of pretax
profit for Islamic banks. Since these banks account for less than
16% of their respective financial groups’ earnings, the impact at
the group level is even more marginal at <1%. Our BUYs continue to
be AMMB, HL Bank and HL Financial Group.
The impact to BIMB Holdings would be larger since Bank Islam
accounts for 81% of group pretax profit. Even so, we think the
impact would still be manageable at just -4%. Our current
forecasts already impute higher operating costs and we maintain
our HOLD on BIMB pending further update.
Analyst
Desmond Ch’ng, ACA
(603) 2297 8680
desmond.chng@maybank-ib.com
Banking sector – Peer valuation summary
Stock Rec Shrpx Marketcap
TP PER (x) PER (x)
P/BV (x)
P/BV (x)
ROAE (%)
ROAE (%)
Yield (%)
Yield (%)
(MYR) (MYR m) (MYR) CY14E CY15E CY14E CY15E CY14E CY15E CY14E CY15E
AMMB BUY 6.99 21,069 8.60 10.9 10.0 1.5 1.4 14.3 14.3 3.8 4.1
CIMB HOLD 7.00 57,605 8.00 12.3 11.0 1.6 1.4 14.0 13.7 3.3 3.6
HL Bank BUY 14.20 25,543 16.40 11.8 10.8 1.7 1.5 15.1 14.9 2.7 3.0
Maybank * NR 9.55 84,653 NR 12.0 11.4 1.7 1.5 14.6 14.1 5.8 6.1
Public Bank SELL 19.04 66,680 18.00 15.4 14.2 2.9 2.5 19.8 19.1 2.9 3.2
RHB Cap HOLD 8.00 20,375 8.40 10.1 9.2 1.1 1.0 11.4 11.2 2.3 2.5
Simple avg 275,926 12.1 11.1 1.7 1.6 14.9 14.5 3.4 3.7
MC-wtd 12.7 11.7 1.9 1.7 15.5 15.1 3.9 4.2
BIMB HOLD 4.03 6,019 4.30 11.7 10.4 2.0 1.8 18.6 18.6 3.2 3.6
HLFG BUY 15.22 16,024 17.30 9.9 9.2 1.4 1.2 14.2 13.9 2.5 2.8
Source: Maybank KE * Based on consensus
March 18, 2014 2
Malaysian Banks
Deposit account or investment account?
Common Shariah principles
Before discussing the proposed changes in guidelines pertaining to Islamic
deposits, we would like to provide a brief summary of some of the more
common Shariah principles that are applied to Islamic deposits, which are:
Islamic principles applied to term deposits and CASA
Term deposits Current account/savings accounts (CASA)
Mudarabah (profit sharing) Mudarabah (profit sharing)
Murabahah (cost plus) Wadiah (custody or safekeeping)
Wakalah (agency) Qard (benevolent loan)
Source: Various
A summary of the various principles
Mudarabah Murabahah Wakalah Wadiah Qard
Concept of: Profit sharing Cost plus Agency Safekeeping/Custody Benevolent loan
Definition: A contract between a capital
provider (rabbul mal) and
entrepreneur (mudarib).
The rabbul mal provides
capital to be managed by the
mudarib.
Any profit is shared, with the
profit sharing ratio (PSR)
determined upfront.
Financial losses are borne
solely by the rabbul mal
(depositor) unless the mudarib
(bank) is negligent.
Customer purchases
an asset from the
vendor on a cost-plus
mark-up basis.
The mark-up or profit
margin has to be
agreed upfront.
The asset must exist
and be identifiable in
terms of its location,
quantity and quality.
Assets under
construction are not
eligible.
A contract in which a
party (muwakkil)
authorizes another
party as his agent
(wakil) to perform a
particular task.
As an agent, the bank
receives wakalah
(agency) fees.
The wakalah fee may
be determined based
on a percentage of a
reference rate eg the
BFR/BLR, KLIBOR or
cost of funds.
A contract by which
an owned asset is
placed with another
party on the basis of
trusteeship (amanah)
for safekeeping
purposes. Wadiah Yad
Dhamanah is applied
in Malaysia where the
custodian guarantees
the asset placed in
custody.
Bank may charge a
fee for safekeeping
the asset.
A contract of lending
a fungible asset to a
party who will benefit
from it and who will
return an equivalent
replacement.
Any pre-determined
amount (cash, kind or
benefit) over and
above the principal
qard amount, is
deemed riba.
The bank may give
hibah (a gift) to the
depositor at its own
discretion, provided it
is not pre-conditional.
Types: General Investment Account
(GIA): the most common form
of Islamic term deposits for
the mass market.
Special Investment Account
(SIA): Large deposits usually
from corporate depositors.
The depositor can negotiate
the PSR.
Specific Investment Account
(CIA): Depositor can negotiate
the PSR and decide which
projects it wants to
participate in. Profits placed
in a special pool which the
bank shares solely with that
depositor.
Bai Al-Inah;
underlying asset is
normally the bank’s
own assets eg floor
space, company car
etc.
Commodity
Murabahah:
underlying asset is a
commodity eg palm
oil or metal.
Source: BNM, Various
March 18, 2014 3
Malaysian Banks
Deposits of an Islamic bank
In Malaysia, just to illustrate how the principles are applied, what we have
below is a breakdown of CIMB Islamic Bank’s customer deposits by product
type for illustration purposes, given that it has a more comprehensive
breakdown of its deposits than most of the other banks.
As we can see from the breakdown below, the principles of Wadiah, Qard
and Mudarabah are applied to savings and demand deposits. For term
deposits, the principles of Mudarabah, Murabahah, Wakalah are the most
common. The common feature between all three accounts is the
application of the Mudarabah principle.
CIMB Islamic Bank’s deposit breakdown by product type (Dec 2013)
Savings deposits MYR’m
Wadiah 1,734.3
Mudarabah 711.6
Demand deposits
Wadiah 3,439.7
Qard 11.9
Mudarabah 4,793.2
Term deposits
Commodity Murabahah 5,652.8
Negotiable Islamic Debt Certificate (NIDC)
- Mudarabah 414.6
- Hybrid (Bai Bithamin Ajil and Bai al-Dayn) 5,519.4
Short-term money market deposit-i
- Wakalah 14,841.9
- Wadiah 502.9
General investment account
- Mudarabah 3,200.2
Specific investment account
- Mudarabah 337.6
- Murabahah 0.4
Others
- Qard 25.4
Total deposits from customers 41,186.1
Source: Company
March 18, 2014 4
Malaysian Banks
Treatment of Mudarabah Accounts
Differentiating between deposit and investment accounts
Bank Negara’s Islamic Financial Services Act 2013 (IFSA) sets out the
definition of “Islamic deposits” and “Investment accounts” as follows:
Islamic deposit: A sum of money accepted or paid in accordance with
Shariah:
a) On terms under which it will be repaid in full, with or without any
gains, return or any other consideration in money or money’s
worth, either on demand or at a time or in circumstances agreed
by or on behalf of the person making the payment and person
accepting it; or
b) Under an arrangement on terms whereby the proceeds under the
arrangement to be paid to the person paying the sum of money
shall not be less than such sum of money.
Investment account: An account under which money is paid and accepted
for the purposes of investment, including for the provision of finance, in
accordance with Shariah on terms that there is no express or implied
obligation to repay the money in full and:
a) Either only the profits, or both the profits or losses, thereon shall
be shared between the person paying the money and the person
accepting the money; or
b) With or without any return.
Mudarabah accounts cannot be deposits
By virtue of the definitions above, to be deemed a deposit, the capital
amount has to be protected.
Mudarabah accounts, which are based on the concept of profit sharing,
should not be deemed to be deposit accounts, as is the current practice,
because under this principle, there can be no guarantee that the principal
amount will be protected.
In fact, under Mudarabah, the capital provider/depositor stands to bear all
losses unless there is negligence on the part of the bank. As such,
Mudarabah deposits should be treated as investments.
Mudarabah accounts to be taken off-balance sheet?
In adhering strictly to the Mudarabah definition, Mudarabah account
holders cannot be treated as depositors because the capital is not
guaranteed and they stand to absorb all losses. Neither are they
shareholders because they do not have voting rights and are entitled to
profit distribution prior to dividend distributions. As such, Mudarabah
accounts are neither deposits nor equity and have to be reclassified as
investment accounts. But if they are investment accounts, where should
they appear in the balance sheet?
March 18, 2014 5
Malaysian Banks
One possible treatment is to take these investment accounts off-balance
sheet, a treatment which is illustrated in this excerpt from Al Rajhi
Banking & Investment Corporation’s (Al-Rajhi) latest financial statements
(2013). What we can see from the illustration below is that the Mudarabah
investment accounts are classified as a separate note to the accounts as an
off-balance sheet item.
Al Rajhi’s notes to the accounts (Dec 2013)
Source: Company
Whether an investment account has to be taken off-balance sheet or not
has not been clearly spelt out just yet by Bank Negara. We think it will
eventually depend on whether the account is a “restricted investment
account (RIA)” or “unrestricted investment account (URIA)”. Bank Negara
defines these two accounts as follows:
A restricted investment account (RIA) refers to a type of investment
account where the investment account holder provides a specific
investment mandate to the bank with regards to the purpose, asset
class, economic sector and period of investment.
An unrestricted investment account (URIA) refers to a type of
investment account where the investment account holder allows the
bank to make the ultimate investment decision without specifying any
particular restriction or condition.
RIAs, which are more akin to Mudarabah Specific Investment Accounts, may
have to be taken off-balance sheet, in our view. These currently account
for just a small portion of total deposits.
As for URIAs eg Mudarabah General and Special Investment Accounts, the
option may be to have these classified as a balance sheet line item that is
separate to customer deposits, but at least they could potentially be left
on-balance sheet.
March 18, 2014 6
Malaysian Banks
The implications and options to a bank
In light of the above, banks essentially have two main options: (i) to either
keep the Mudarabah status of their accounts, or (ii) to consider alternative
Islamic principle treatments to these accounts.
Option 1: To keep the Mudarabah status of the accounts
If banks opt to maintain the Mudarabah status their accounts, they will
have to reclassify these accounts as investment accounts rather than
deposits. There are several implications to this treatment:
1. Asset size may see a slight reduction. As discussed above, it has not
been decided just yet as to what extent investment accounts have to
be taken off-balance sheet – this in turn would determine the extent to
which a bank’s asset size would contract. The impact is likely to be
quite mild if only RIA are taken off-balance sheet.
2. These deposits may no longer be guaranteed by PIDM. All depositors
(whether business or individuals) are insured by Perbadanan Insurans
Deposit Malaysia (PIDM) to the tune of MYR250,000 per depositor per
member financial institution. Mudarabah deposits, once classified as
investment accounts, may no longer be guaranteed by PIDM. Whether
banks have to compensate for this higher risk via higher profit rates,
remains to be seen.
3. Increased administrative procedures, possible impact to Basel III
ratios? As an investment account product, banks will have to prepare
product disclosure sheets and provide regular updates on the
performance of the underlying investments. Moreover, the
management and maintenance of investment accounts has to be
separated from other funds and assets managed by the bank.
It is not clear at this stage as to whether Basel III ratios such as the
liquidity coverage ratio or net stable funding ratio would be impacted
by having removed these deposits from the balance sheet.
4. Third party guarantees? We understand that another possible way of
keeping the Mudarabah accounts on-balance sheet is to have these
accounts carry third party guarantees, but this would entail additional
costs. This could possibly be feasible for term deposits, but would be
costly for CASA.
March 18, 2014 7
Malaysian Banks
Option 2a: to apply an alternative Islamic principle - Wadiah
In a bid to keep the deposits on balance sheet, banks could opt to apply an
alternative Islamic principle to these deposits. At this point in time, the
two most obvious choices would be either (i) Wadiah or (ii) Murabahah, or
more specifically, Commodity Murabahah.
Applying the Wadiah principle
The most obvious alternative would be to convert the Mudarabah deposits
to Wadiah deposits. However, in Dec 2013, Bank Negara issued an Exposure
Draft (ED) on Wadiah, which places various conditions on such accounts,
thus complicating the conversion from Mudarabah to Wadiah.
A quick review of two principles:
Wadiah employs the concept of trusteeship whereby the depositor
places his funds with the bank for safekeeping. In Malaysia, the
Shariah principle employed is Wadiah Yad Dhamanah, which extends
the safekeeping concept to include custodianship. The bank, as a
custodian, guarantees the asset placed in custody and must act to
safeguard the asset.
Qard is a benevolent loan and refers to a contract of lending a
fungible asset to a party who will benefit from it and who will
subsequently return an equivalent replacement.
Wadiah to be treated as similar to Qard
According to Bank Negara’s ED on Wadiah:
“Under Wadiah Yad Dhamanah involving money, the asset placed in
custody is in monetary form and the custodian is allowed to utilize the
money subject to the permission of the asset owner. Money is regarded as
a form of fungible asset. Therefore, it is construed as a Qard contract and
shall adhere to the rules related to Qard”
What this implies is that Wadiah Yad Dhamanah is similar in nature to Qard
if it involves money and therefore should adhere to rules relating to Qard.
The ED goes on to define the requirements of Qard, of which the key ones
are as follows:
“Any-predetermined additional in the form of cash, kind or benefit
over and above the principal Qard amount, either imposed by the
lender or promised by the borrower, is deemed riba.”
This implies that there should be no promise of a profit or return on
Wadiah deposits, which may otherwise be construed as riba (interest).
Technically, this implies that banks cannot offer a predetermined
profit rate on Wadiah deposits.
“Incentives promised to a lender to enter into a Qard contract with a
borrower may result in implicit benefit to the lender, which is
tantamount to riba.”
We take this to mean that banks will not be allowed to do marketing
or promotional campaigns to promote their Wadiah products.
March 18, 2014 8
Malaysian Banks
“The borrower may give hibah, either in monetary or non-monetary
form, to the lender at its own discretion provided that it is not pre-
conditional at the time of entering into the Qard contract and that
such practice does not become a customary practice (urf)….the
practice of giving hibah is considered as customary if the hibah is given
to the majority of borrower’s lenders.”
By definition, a “hibah” is essentially a gift at the discretion of the
bank to the depositor who has placed his funds with the bank for
safekeeping. If this gift is given to the majority, or all, of the
depositors, it could be construed as riba.
Several issues
The adherence to the refined definition of hibah may limit the banks’
ability to offer a return to depositors and they cannot advertise the profit
rates on their Wadiah accounts. Depositors, as such, cannot be assured of a
recurrent profit on their deposits.
Banks will be restricted in their ability to run marketing activities or offer
promotional products to attract new Wadiah depositors. This could place
the Islamic banks at a disadvantage to conventional banks in terms of
deposit gathering activity.
We think the implications of the above are that it is:
Possible to still convert Mudarabah current accounts to Wadiah
current accounts. We think it would still be possible to convert
Mudarabah current accounts, especially those used for transactional
purposes such as cash management, to Wadiah accounts, since there is
typically no expectation of a return on such deposits.
Tougher for savings accounts and term deposit accounts. Converting
savings accounts and term deposit accounts from Mudarabah to Wadiah
could be difficult, given that there is typically the expectation of some
return on such accounts.
Option 2b: To apply an alternative Islamic principle –
Commodity Murabahah
The alternative to Wadiah would be the Commodity Murabahah principle,
whereby the customer purchases an asset from the vendor on a cost-plus
mark-up basis, and the mark-up or profit margin has to be agreed upfront.
In this case, the asset has to be a commodity.
Most viable alternative at this stage. Having spoken to several industry
players, the conversion of Mudarabah accounts to Commodity Murabahah is
the most viable at this stage.
Where Commodity Murabahah is concerned, it requires the bank to
physically purchase an asset or commodity for on-sell to the depositor on a
cost-plus basis. In Malaysia, the banks use the funds received from
depositors to buy commodities either from the London Metal Exchange
(LME) or from Bursa Malaysia.
March 18, 2014 9
Malaysian Banks
In the case of Bursa Malaysia, it was in August 2009 that it launched its
multi-commodity, multi-currency Bursa Suq Al-Sila (which means
“commodities market” in Arabic), an international commodity platform to
facilitate commodity-based Islamic financing and investment transactions.
This commodity facilitates trading on several commodities, the more
predominant ones being crude palm oil and plastic resin (PE).
Commodities on Bursa Suq Al-Sila can purchased/sold throughout the day
in cycles of 2-3 hours each, during which time the price is fixed, to cap
fluctuations in commodity prices. We understand that LME is a cheaper
alternative as trading can also be done on-line.
The downside to Commodity Murabahah is that it is a slightly more
expensive alternative to Mudarabah because a transaction fee of MYR15 is
levied on every MYR1m transaction on both the buy and sell side. This as
such, increases the operating costs to a bank that decides to pursue this
route. This transaction fee will be treated as an operating expense.
Moving away from Bai’ ‘Inah financing as well
Turning our attention away from deposits to financing, Bank Negara has
also issued an ED on Bai’ ‘Inah, which is one of several Islamic principles
applied to financing activity such as credit card or personal financing.
According to the Islamic Banking & Finance Institute Malaysia:
Bai’ ‘Inah is a financing facility involving two separate contracts. In the
first contract a financier sells an asset to a customer on deferred
payment terms. Immediately after, the financier repurchases the same
asset from the customer on cash terms at a price lower than that of
the deferred payment sale.
It can also be applied vice versa where a financier buys an asset from a
customer on cash terms. Immediately after, the financier sells back
the same asset to the customer on deferred payment terms at a price
higher than that of the cash sale
The issue of inter-conditionality or the lack thereof
The complication arises in that the ED prescribes that “neither contracting
party in the Bai’ ‘Inah arrangement must provide either a written or verbal
promise to repurchase or resell the asset.”
In short, there can no longer be an inter-conditionality that if a bank sells
the asset to the customer, that the customer MUST sell the asset back to
the bank. This creates an issue over asset ownership for banks.
Likely to move to Commodity Murabahah as well
The options here would be to either (i) adhere to the new guideline with
additional safeguards in place or (ii) shift to Commodity Murabahah as well
for such transactions. From our discussion with the banks, the latter seems
to be the more preferred choice at this stage.
March 18, 2014 10
Malaysian Banks
What are banks likely to do?
From our enquiries, most banks are still in discussion with Bank Negara and
have been fairly reluctant to divulge the route that they plan to take just
yet. It is our view that:
For Bai’ ‘Inah financing, the deadline for compliance was end-Dec 2013
and banks would either have (i) complied with the stricter
requirements of the new regulation or (ii) stopped providing Bai’ ‘Inah
financing already. We expect the banks to start offering Commodity
Murabahah financing as an alternative instead.
For Mudarabah term deposits, it is most likely that banks will covert
these to Commodity Murabahah deposits.
For Wadiah current accounts, we think that maintaining status quo
would be the cheaper option. Arguably, hibah, if any, is only offered to
corporate clients and not so much to retail clients so it is on a
selective basis already.
For Mudarabah current accounts, conversion to Wadiah could be a
possibility. The alternative would be to leave these as Mudarabah
investment accounts. There will, however, be more administrative
work involved.
For Mudarabah and Wadiah savings deposits, we think it is likely that
these may be converted to Commodity Murabahah deposits as well.
The alternative would be to reclassify these as investment accounts.
What are the overall implications to a bank?
The implementation of the new guidelines will have several implications to
Islamic banks:
Balance sheets could reduce marginally in size
If Mudarabah/wakalah accounts are taken off-balance sheet, banks’ asset
size would contract. Mudarabah/wakalah accounts make up about 43% of
total assets of the Islamic banks. HOWEVER, as we have discussed on page
5, the impact is likely very marginal if only restricted investment accounts
(RIA) are taken off-balance sheet, for these make up a much smaller
proportion of deposits (negligible at this stage).
Mudarabah deposits as % of total deposits and total assets
Affin Alliance AM Bk Islam CIMB HL Maybank Public RHB
Savings 38 460 33 - 4,793 44 9,222 95 538
Demand 137 130 6 2,295 712 1,168 742 64 156
General investment 4,575 581 15,378 2,012 3,538 2,423 15,055 3,206 897
Special investment 574 573 54 18,436 415 268 143 - 12,734
Mudarabah deposits 5,323 1,745 15,471 22,744 9,458 3,903 25,162 3,364 14,325
Wakalah deposits - 2,204 - - 14,842 - - 16,612 4
Mudarabah/wakalah deps 5,323 3,949 15,471 22,744 24,300 3,903 25,162 19,976 14,329
As % of total deposits 57% 62% 68% 62% 59% 23% 30% 70% 68%
As % of total assets 43% 54% 47% 53% 41% 18% 20% 58% 49%
Source: Company
March 18, 2014 11
Malaysian Banks
Additional operating costs
Additional operating costs could take several forms:
(i) If Mudarabah accounts are converted to investment accounts,
there is the cost of issuing investment prospectuses and preparing
regular updates on the performance of the assets.
(ii) If Commodity Murabahah is the preferred route, there is the
transaction cost of MYR15 that has to be incurred for every MYR1m
transaction.
(iii) IT systems may have to be upgraded to ensure the proper tagging
of assets to liabilities, and additional personnel may have to be
employed to cope with the increase in transactional activity.
Potential opportunity costs?
Given that much is still preliminary, it is unclear as to how retail customers
in particular would react to the conversion of their Mudarabah deposit
accounts to investment accounts, particularly with the knowledge that the
latter may not carry a PIDM guarantee.
As for Wadiah accounts, the restrictions on promotional activity and rate
advertising may place Islamic banks at a disadvantage to conventional
banks especially in terms of their CASA gathering efforts.
That Malaysia runs a parallel banking system does mean that Islamic banks
would have to compete even more aggressively with the conventional
banks for funds.
An attempt at quantifying the cost
In attempting to quantify the cost of compliance to a bank, we have to
stress upfront that this is purely a theoretical exercise with standard
parameters applied across all banks.
In reality, the actual overall impact will very much depend on factors such
as (i) the compliance route a bank decides to take, and (ii) the frequency
of churn on the individual deposit accounts.
Our primary assumptions Our primary assumptions include the following:
Current accounts remain status quo, either as Wadiah or Mudarabah;
Mudarabah and non-Mudarabah savings accounts are converted to
Commodity Mudarabah and are churned every two days
Mudarabah and wakalah term deposits are converted to Commodity
Murabahah and are churned every month
Bai’ ’ínah accounts are replaced with Commodity Murabahah accounts
Commodity Murabahah accounts incur a total fee of MYR30 per MYR1m
transaction for both purchase and sale.
March 18, 2014 12
Malaysian Banks
Estimating the transaction costs pertaining to Commodity Murabahah conversion
Total deposits (2013) Affin Alliance AM Bk Islam CIMB HL Maybank Public RHB
Non-Mudarabah Demand 2,718 1,529 3,439 9,790 3,452 2,204 8,179 2,959 2,090
Savings 228 172 1,806 2,379 1,734 937 8,878 4,823 780
Wakalah - 2,204 - - 14,842 - - 16,612 4
Others 1,022 739 1,930 2,014 11,701 10,154 41,157 643 3,835
3,967 4,644 7,175 14,183 31,728 13,295 58,214 25,037 6,709
Mudarabah
Demand 38 460 33 - 4,793 44 9,222 95 538
Savings 137 130 6 2,295 712 1,168 742 64 156
General investment 4,575 581 15,378 2,012 3,538 2,423 15,055 3,206 897
Special investment 574 573 54 18,436 415 268 143 - 12,734
5,323 1,745 15,471 22,744 9,458 3,903 25,162 3,364 14,325
FV changes (16)
Total deposits 9,291 6,389 22,645 36,927 41,186 17,182 83,376 28,401 21,034
Bai'Ínah accounts - 646 - 1,282 12,398 - - 2,500 3,573
Churn assumptions (days)
Non-Mudarabah savings 2 2 2 2 2 2 2 2 2
Non-Mudarabah wakalah 30 30 30 30 30 30 30 30 30
Mudarabah savings 2 2 2 2 2 2 2 2 2
Mudarabah GIA 30 30 30 30 30 30 30 30 30
Mudarabah SIA 30 30 30 30 30 30 30 30 30
Bai' 'inah 365 365 365 365 365 365 365 365 365
Transaction costs
Non-Mudarabah savings 1.2 0.9 9.9 13.0 9.5 5.1 48.6 26.4 4.3
Non-Mudarabah wakalah - 0.8 - - 5.4 - - 6.1 0.0
Mudarabah savings 0.7 0.7 0.0 12.6 3.9 6.4 4.1 0.3 0.9
Mudarabah GIA 1.7 0.2 5.6 0.7 1.3 0.9 5.5 1.2 0.3
Mudarabah SIA 0.2 0.2 0.0 6.7 0.2 0.1 0.1 - 4.6
Bai' 'inah - 0.0 - 0.0 0.4 - - 0.1 0.1
Total transaction costs 3.9 2.9 15.6 33.1 20.6 12.5 58.2 34.1 10.2
Islamic bank pretax (FY13) 87.3 55.4 233.7 677.3 860.5 139.2 1,474.1 473.2 329.0
Transaction costs as a % 4.4% 5.2% 6.7% 4.9% 2.4% 9.0% 3.9% 7.2% 3.1%
Group pretax profit (FY13) 863.9 541.6 1,866.7 833.1 5,541.0# 1,362.7 8,869.6 5,310.0 2,470.8
Transaction costs as a % 0.4% 0.5% 0.8% 4.0% 0.4% 0.9% 0.7% 0.6% 0.4%
Islamic pretax as % of group 10.1% 10.2% 12.5% 81.3% 15.5% 10.2% 16.6% 8.9% 13.3%
Source: Company, Maybank KE # Adjusted for sale of CIMB Aviva and MSS
March 18, 2014 13
Malaysian Banks
Key observations – minimal financial impact
As it stands, we do think that the churn rates that we have applied are
fairly stringent and that the actual impact could be less than we have
computed. Nevertheless, some observations would be that:
The estimated transaction costs average about 5% of pretax profit for
the Islamic banks, ranging from 2% for CIMB Islamic Bank to potentially
9% for Hong Leong Islamic Bank.
The impact to the group earnings of these financial institutions,
however, is very negligible, overshadowed in large part by the sizeable
contributions of their respective conventional banks. Public Islamic
Bank, for instance, accounted for just 9% of Public Bank group’s pretax
profit in FY13, while Maybank Islamic Bank accounted for 17% of
Maybank group’s pretax profit. The impact of higher transaction costs
to group earnings is thus very negligible at less than 1% for all banking
groups.
The exception, unsurprisingly, is Bank Islam, whose pretax profit in
FY13 accounted for 81% of BIMB Holdings’ earnings, given that it is one
of only two standalone Islamic banks in the country (the other being
Bank Muamalat). Syarikat Takaful accounts for the remaining portion
of BIMB Holdings’ earnings. The impact of higher transaction costs to
BIMB’s group earnings is thus estimated to be a larger, but still very
manageable 4%, of group pretax profit.
Timeline for implementation
The deadline for compliance with the new framework for Mudarabah
accounts depends on whether banks intend to (i) comply with the new
Investment Account framework, or (ii) opt for alternative products eg
Commodity Murabahah.
If the intention is to comply with the new Investment Account framework,
banks will be allowed to continue booking Mudarabah deposits until June
2015 and will only need to reclassify these as investments after June 2015.
If banks are looking to apply alternative Islamic principle treatment, eg
Commodity Murabahah, Mudarabah deposits must be reclassified as
investments after June 2014. The alternative deposit product must be
made available to the public by April 1, 2014 for term deposits or July 1,
2014 for CASA.
March 18, 2014 14
Malaysian Banks
Research Offices
REGIONAL
WONG Chew Hann, CA
Regional Head of Institutional Research (603) 2297 8686 wchewh@maybank-ib.com
ONG Seng Yeow
Regional Head of Retail Research
(65) 6432 1453 ongsengyeow@maybank-ke.com.sg
Alexander GARTHOFF
Institutional Product Manager
(852) 2268 0638 alexgarthoff@kimeng.com.hk
ECONOMICS
Suhaimi ILIAS
Chief Economist
Singapore | Malaysia
(603) 2297 8682 suhaimi_ilias@maybank-ib.com
Luz LORENZO
Philippines
(63) 2 849 8836 luz_lorenzo@maybank-atrke.com
Tim LEELAHAPHAN
Thailand (662) 658 1420 tim.l@maybank-ke.co.th
JUNIMAN
Chief Economist, BII
Indonesia
(62) 21 29228888 ext 29682 Juniman@bankbii.com
Josua PARDEDE
Economist / Industry Analyst, BII
Indonesia
(62) 21 29228888 ext 29695 JPardede@bankbii.com
MALAYSIA
WONG Chew Hann, CA Head of Research (603) 2297 8686 wchewh@maybank-ib.com • Strategy • Construction & Infrastructure
Desmond CH’NG, ACA (603) 2297 8680 desmond.chng@maybank-ib.com • Banking & Finance
LIAW Thong Jung (603) 2297 8688 tjliaw@maybank-ib.com • Oil & Gas - Regional • Shipping
ONG Chee Ting, CA (603) 2297 8678 ct.ong@maybank-ib.com • Plantations - Regional
Mohshin AZIZ (603) 2297 8692 mohshin.aziz@maybank-ib.com • Aviation - Regional • Petrochem
YIN Shao Yang, CPA (603) 2297 8916 samuel.y@maybank-ib.com • Gaming – Regional • Media
TAN Chi Wei, CFA (603) 2297 8690 chiwei.t@maybank-ib.com • Power • Telcos
WONG Wei Sum, CFA (603) 2297 8679 weisum@maybank-ib.com • Property & REITs
LEE Yen Ling (603) 2297 8691 lee.yl@maybank-ib.com • Building Materials • Glove Producers
CHAI Li Shin (603) 2297 8684 lishin.c@maybank-ib.com • Plantation • Construction & Infrastructure
KANG Chun Ee (603) 2297 8675 chunee@maybank-ib.com • Consumer
Ivan YAP (603) 2297 8612 ivan.yap@maybank-ib.com • Automotive
LEE Cheng Hooi Regional Chartist (603) 2297 8694 chenghooi.lee@maybank-ib.com
Tee Sze Chiah Head of Retail Research (603) 2297 6858 szechiah.t@maybank-ib.com
HONG KONG / CHINA
Howard WONG Head of Research (852) 2268 0648 howardwong@kimeng.com.hk • Oil & Gas - Regional
Alexander LATZER (852) 2268 0647 alexanderlatzer@kimeng.com.hk • Metals & Mining - Regional
Jacqueline KO, CFA (852) 2268 0633 jacquelineko@kimeng.com.hk • Consumer
Karen KWAN (852) 2268 0640 karenkwan@kimeng.com.hk • Property & REITs
Osbert TANG, CFA (852) 21 5096 8370 osberttang@kimeng.com.hk • Transport & Industrials
Philip TSE, CFA FRM (852) 2268 0643 philiptse@kimeng.com.hk • Property & REITs
Ricky WK NG, CFA (852) 2268 0689 rickyng@kimeng.com.hk • Utilities & Renewable Energy
Simon QIAN, CFA (852) 2268 0634 simonqian@kimeng.com.hk • Telecom & Internet
Steven ST CHAN (852) 2268 0645 stevenchan@kimeng.com.hk • Banking & Financials
Warren LAU (852) 2268 0644 warrenlau@kimeng.com.hk • Technology – Regional
William YANG (852) 2268 0675 williamyang@kimeng.com.hk • Technology – Regional
INDIA
Jigar SHAH Head of Research
(91) 22 6623 2601
jigar@maybank-ke.co.in
• Oil & Gas • Automobile • Cement
Anubhav GUPTA
(91) 22 6623 2605
anubhav@maybank-ke.co.in
• Metal & Mining • Capital Goods • Property
Urmil SHAH
(91) 22 6623 2606 urmil@maybank-ke.co.in
• Technology • Media
SINGAPORE
NG Wee Siang Head of Research (65) 6432 1467 ngweesiang@maybank-ke.com.sg • Banking & Finance
Gregory YAP (65) 6432 1450 gyap@maybank-ke.com.sg • SMID Caps – Regional • Technology & Manufacturing • Telcos
Wilson LIEW (65) 6432 1454 wilsonliew@maybank-ke.com.sg • Property Developers
ONG Kian Lin (65) 6432 1470 ongkianlin@maybank-ke.com.sg • S-REITs
James KOH (65) 6432 1431 jameskoh@maybank-ke.com.sg • Consumer - Regional
YEAK Chee Keong, CFA (65) 6432 1460 yeakcheekeong@maybank-ke.com.sg • Offshore & Marine
Derrick HENG (65) 6432 1446 derrickheng@maybank-ke.com.sg • Transport (Land, Shipping & Aviation)
WEI Bin (65) 6432 1455 weibin@maybank-ke.com.sg • Commodity • Logistics • S-chips
John CHEONG (65) 6432 1461 johncheong@maybank-ke.com.sg • Small & Mid Caps • Healthcare
INDONESIA
Wilianto IE Head of Research (62) 21 2557 1125 willianto.ie@maybank-ke.co.id • Strategy
Rahmi MARINA (62) 21 2557 1128 rahmi.marina@maybank-ke.co.id • Banking & Finance
Aurellia SETIABUDI (62) 21 2953 0785 aurellia.setiabudi@maybank-ke.co.id • Property
Anthony YUNUS (62) 21 2557 1136 anthony.yunus@maybank-ke.co.id • Consumer • Poultry
Isnaputra ISKANDAR (62) 21 2557 1129 isnaputra.iskandar@maybank-ke.co.id • Metals & Mining • Cement
Pandu ANUGRAH (62) 21 2557 1137
pandu.anugrah@maybank-ke.co.id • Infrastructure • Construction • Transport
Janni ASMAN (62) 21 2953 0784 janni.asman@maybank-ke.co.id • Cigarette • Healthcare • Retail
PHILIPPINES
Luz LORENZO Head of Research (63) 2 849 8836 luz_lorenzo@maybank-atrke.com • Strategy
Laura DY-LIACCO (63) 2 849 8840 laura_dyliacco@maybank-atrke.com • Utilities • Conglomerates • Telcos
Lovell SARREAL (63) 2 849 8841 lovell_sarreal@maybank-atrke.com • Consumer • Media • Cement
Rommel RODRIGO (63) 2 849 8839 rommel_rodrigo@maybank-atrke.com • Conglomerates • Property • Gaming • Ports/ Logistics
Katherine TAN (63) 2 849 8843 kat_tan@maybank-atrke.com • Banks • Construction
Ramon ADVIENTO (63) 2 849 8845 ramon_adviento@maybank-atrke.com • Mining
THAILAND
Maria LAPIZ Head of Institutional Research Dir (66) 2257 0250 | (66) 2658 6300 ext 1399 Maria.L@maybank-ke.co.th • Consumer / Materials
Jesada TECHAHUSDIN, CFA (66) 2658 6300 ext 1394 Jesada.T@maybank-ke.co.th • Financial Services
Kittisorn PRUITIPAT, CFA, FRM (66) 2658 6300 ext 1395 Kittisorn.P@maybank-ke.co.th • Real Estate
Sittichai DUANGRATTANACHAYA (66) 2658 6300 ext 1393 Sittichai.D@maybank-ke.co.th • Services Sector
Sukit UDOMSIRIKUL Head of Retail Research (66) 2658 6300 ext 5090 Sukit.u@maybank-ke.co.th
Mayuree CHOWVIKRAN (66) 2658 6300 ext 1440 mayuree.c@maybank-ke.co.th • Strategy
Padon VANNARAT (66) 2658 6300 ext 1450 Padon.v@maybank-ke.co.th • Strategy
Surachai PRAMUALCHAROENKIT (66) 2658 6300 ext 1470 Surachai.p@maybank-ke.co.th • Auto • Conmat • Contractor • Steel
Suttatip PEERASUB (66) 2658 6300 ext 1430 suttatip.p@maybank-ke.co.th • Media • Commerce
Sutthichai KUMWORACHAI (66) 2658 6300 ext 1400 sutthichai.k@maybank-ke.co.th • Energy • Petrochem
Termporn TANTIVIVAT (66) 2658 6300 ext 1520 termporn.t@maybank-ke.co.th • Property
Woraphon WIROONSRI (66) 2658 6300 ext 1560 woraphon.w@maybank-ke.co.th • Banking & Finance
Jaroonpan WATTANAWONG (66) 2658 6300 ext 1404 jaroonpan.w@maybank-ke.co.th • Transportation • Small cap
Chatchai JINDARAT (66) 2658 6300 ext 1401 chatchai.j@maybank-ke.co.th • Electronics
VIETNAM
LE Hong Lien, ACCA Head of Institutional Research (84) 844 55 58 88 x 8181 lien.le@maybank-kimeng.com.vn • Strategy • Consumer • Diversified • Utilities
THAI Quang Trung, CFA, Deputy Manager, Institutional Research (84) 844 55 58 88 x 8180 trung.thai@maybank-kimeng.com.vn • Real Estate • Construction • Materials
TRUONG Thanh Hang (84) 844 55 58 88 x 8085 hang.truong@maybank-kimeng.com.vn • Consumer
Le Nguyen Nhat Chuyen (84) 844 55 58 88 x 8082 chuyen.le@maybank-kimeng.com.vn • Oil & Gas NGUYEN Thi Ngan Tuyen, Head of Retail Research (84) 8 44 555 888 x 8081 tuyen.nguyen@maybank-kimeng.com.vn • Food & Beverage • Oil&Gas • Banking
NGUYEN Trung Hoa, Dy Head of Retail Research (84) 8 44 555 888 x 8088 hoa.nguyen@maybank-kimeng.com.vn • Macro • Steel • Real estate
TRINH Thi Ngoc Diep (84) 4 44 555 888 x 8208 diep.trinh@maybank-kimeng.com.vn • Technology • Utilities • Construction
TRUONG Quang Binh (84) 4 44 555 888 x 8087 binh.truong@maybank-kimeng.com.vn • Rubber plantation • Tyres and Tubes • Oil&Gas
PHAM Nhat Bich (84) 8 44 555 888 x 8083 bich.pham@maybank-kimeng.com.vn • Consumer • Manufacturing • Fishery
NGUYEN Thi Sony Tra Mi (84) 8 44 555 888 x 8084 mi.nguyen@maybank-kimeng.com.vn • Port operation • Pharmaceutical
• Food & Beverage
March 18, 2014 15
Malaysian Banks
APPENDIX I: TERMS FOR PROVISION OF REPORT, DISCLAIMERS AND DISCLOSURES
DISCLAIMERS
This research report is prepared for general circulation and for information purposes only and under no circumstances should it be considered or intended as an offer to sell or a solicitation of an offer to buy the securities referred to herein. Investors should note that values of such securities, if any, may fluctuate and that each security’s price or value may rise or fall. Opinions or recommendations contained herein are in form of technical ratings and fundamental ratings. Technical ratings may differ from fundamental ratings as technical valuations apply different methodologies and are purely based on price and volume-related information extracted from the relevant jurisdiction’s stock exchange in the equity analysis. Accordingly, investors’ returns may be less than the original sum invested. Past performance is not necessarily a guide to future performance. This report is not intended to provide personal investment advice and does not take into account the specific investment objectives, the financial situation and the particular needs of persons who may receive or read this report. Investors should therefore seek financial, legal and other advice regarding the appropriateness of investing in any securities or the investment strategies discussed or recommended in this report.
The information contained herein has been obtained from sources believed to be reliable but such sources have not been independently verified by Maybank Investment Bank Berhad, its subsidiary and affiliates (collectively, “MKE”) and consequently no representation is made as to the accuracy or completeness of this report by MKE and it should not be relied upon as such. Accordingly, MKE and its officers, directors, associates, connected parties and/or employees (collectively, “Representatives”) shall not be liable for any direct, indirect or consequential losses or damages that may arise from the use or reliance of this report. Any information, opinions or recommendations contained herein are subject to change at any time, without prior notice.
This report may contain forward looking statements which are often but not always identified by the use of words such as “anticipate”, “believe”, “estimate”, “intend”, “plan”, “expect”, “forecast”, “predict” and “project” and statements that an event or result “may”, “will”, “can”, “should”, “could” or “might” occur or be achieved and other similar expressions. Such forward looking statements are based on assumptions made and information currently available to us and are subject to certain risks and uncertainties that could cause the actual results to differ materially from those expressed in any forward looking statements. Readers are cautioned not to place undue relevance on these forward-looking statements. MKE expressly disclaims any obligation to update or revise any such forward looking statements to reflect new information, events or circumstances after the date of this publication or to reflect the occurrence of unanticipated events.
MKE and its officers, directors and employees, including persons involved in the preparation or issuance of this report, may, to the extent permitted by law, from time to time participate or invest in financing transactions with the issuer(s) of the securities mentioned in this report, perform services for or solicit business from such issuers, and/or have a position or holding, or other material interest, or effect transactions, in such securities or options thereon, or other investments related thereto. In addition, it may make markets in the securities mentioned in the material presented in this report. MKE may, to the extent permitted by law, act upon or use the information presented herein, or the research or analysis on which they are based, before the material is published. One or more directors, officers and/or employees of MKE may be a director of the issuers of the securities mentioned in this report.
This report is prepared for the use of MKE’s clients and may not be reproduced, altered in any way, transmitted to, copied or distributed to any other party in whole or in part in any form or manner without the prior express written consent of MKE and MKE and its Representatives accepts no liability whatsoever for the actions of third parties in this respect.
This report is not directed to or intended for distribution to or use by any person or entity who is a citizen or resident of or located in any locality, state, country or other jurisdiction where such distribution, publication, availability or use would be contrary to law or regulation. This report is for distribution only under such circumstances as may be permitted by applicable law. The securities described herein may not be eligible for sale in all jurisdictions or to certain categories of investors. Without prejudice to the foregoing, the reader is to note that additional disclaimers, warnings or qualifications may apply based on geographical location of the person or entity receiving this report.
Malaysia
Opinions or recommendations contained herein are in the form of technical ratings and fundamental ratings. Technical ratings may differ from fundamental ratings as technical valuations apply different methodologies and are purely based on price and volume-related information extracted from Bursa Malaysia Securities Berhad in the equity analysis.
Singapore
This report has been produced as of the date hereof and the information herein may be subject to change. Maybank Kim Eng Research Pte. Ltd. (“Maybank KERPL”) in Singapore has no obligation to update such information for any recipient. For distribution in Singapore, recipients of this report are to contact Maybank KERPL in Singapore in respect of any matters arising from, or in connection with, this report. If the recipient of this report is not an accredited investor, expert investor or institutional investor (as defined under Section 4A of the Singapore Securities and Futures Act), Maybank KERPL shall be legally liable for the contents of this report, with such liability being limited to the extent (if any) as permitted by law.
Thailand
The disclosure of the survey result of the Thai Institute of Directors Association (“IOD”) regarding corporate governance is made pursuant to the policy of the Office of the Securities and Exchange Commission. The survey of the IOD is based on the information of a company listed on the Stock Exchange of Thailand and the market for Alternative Investment disclosed to the public and able to be accessed by a general public investor. The result, therefore, is from the perspective of a third party. It is not an evaluation of operation and is not based on inside information. The survey result is as of the date appearing in the Corporate Governance Report of Thai Listed Companies. As a result, the survey may be changed after that date. Maybank Kim Eng Securities (Thailand) Public Company Limited (“MBKET”) does not confirm nor certify the accuracy of such survey result.
Except as specifically permitted, no part of this presentation may be reproduced or distributed in any manner without the prior written permission of MBKET. MBKET accepts no liability whatsoever for the actions of third parties in this respect.
US
This research report prepared by MKE is distributed in the United States (“US”) to Major US Institutional Investors (as defined in Rule 15a-6 under the Securities Exchange Act of 1934, as amended) only by Maybank Kim Eng Securities USA Inc (“Maybank KESUSA”), a broker-dealer registered in the US (registered under Section 15 of the Securities Exchange Act of 1934, as amended). All responsibility for the distribution of this report by Maybank KESUSA in the US shall be borne by Maybank KESUSA. All resulting transactions by a US person or entity should be effected through a registered broker-dealer in the US. This report is not directed at you if MKE is prohibited or restricted by any legislation or regulation in any jurisdiction from making it available to you. You should satisfy yourself before reading it that Maybank KESUSA is permitted to provide research material concerning investments to you under relevant legislation and regulations.
UK
This document is being distributed by Maybank Kim Eng Securities (London) Ltd (“Maybank KESL”) which is authorized and regulated, by the Financial Services Authority and is for Informational Purposes only. This document is not intended for distribution to anyone defined as a Retail Client under the Financial Services and Markets Act 2000 within the UK. Any inclusion of a third party link is for the recipients convenience only, and that the firm does not take any responsibility for its comments or accuracy, and that access to such links is at the individuals own risk. Nothing in this report should be considered as constituting legal, accounting or tax advice, and that for accurate guidance recipients should consult with their own independent tax advisers.
March 18, 2014 16
Malaysian Banks
Disclosure of Interest
Malaysia: MKE and its Representatives may from time to time have positions or be materially interested in the securities referred to herein and may further act as market maker or may have assumed an underwriting commitment or deal with such securities and may also perform or seek to perform investment banking services, advisory and other services for or relating to those companies.
Singapore: As of March 18, 2014, Maybank KERPL and the covering analyst do not have any interest in any companies recommended in this research report.
Thailand: MBKET may have a business relationship with or may possibly be an issuer of derivative warrants on the securities /companies mentioned in the research report. Therefore, Investors should exercise their own judgment before making any investment decisions. MBKET, its associates, directors, connected parties and/or employees may from time to time have interests and/or underwriting commitments in the securities mentioned in this report.
Hong Kong: KESHK may have financial interests in relation to an issuer or a new listing applicant referred to as defined by the requirements under Paragraph 16.5(a) of the Hong Kong Code of Conduct for Persons Licensed by or Registered with the Securities and Futures Commission.
As of March 18, 2014, KESHK and the authoring analyst do not have any interest in any companies recommended in this research report.
MKE may have, within the last three years, served as manager or co-manager of a public offering of securities for, or currently may make a primary market in issues of, any or all of the entities mentioned in this report or may be providing, or have provided within the previous 12 months, significant advice or investment services in relation to the investment concerned or a related investment and may receive compensation for the services provided from the companies covered in this report.
OTHERS
Analyst Certification of Independence
The views expressed in this research report accurately reflect the analyst’s personal views about any and all of the subject securities or issuers; and no part of the research analyst’s compensation was, is or will be, directly or indirectly, related to the specific recommendations or views expressed in the report.
Reminder
Structured securities are complex instruments, typically involve a high degree of risk and are intended for sale only to sophisticated investors who are capable of understanding and assuming the risks involved. The market value of any structured security may be affected by changes in economic, financial and political factors (including, but not limited to, spot and forward interest and exchange rates), time to maturity, market conditions and volatility and the credit quality of any issuer or reference issuer. Any investor interested in purchasing a structured product should conduct its own analysis of the product and consult with its own professional advisers as to the risks involved in making such a purchase.
No part of this material may be copied, photocopied or duplicated in any form by any means or redistributed without the prior consent of MKE.
Definition of Ratings
Maybank Kim Eng Research uses the following rating system
BUY Return is expected to be above 10% in the next 12 months (excluding dividends)
HOLD Return is expected to be between - 10% to +10% in the next 12 months (excluding dividends)
SELL Return is expected to be below -10% in the next 12 months (excluding dividends)
Applicability of Ratings
The respective analyst maintains a coverage universe of stocks, the list of which may be adjusted according to needs. Investment ratings are only applicable to the stocks which form part of the coverage universe. Reports on companies which are not part of the coverage do not carry investment ratings as we do not actively follow developments in these companies.
DISCLOSURES
Legal Entities Disclosures
Malaysia: This report is issued and distributed in Malaysia by Maybank Investment Bank Berhad (15938-H) which is a Participating Organization of Bursa Malaysia Berhad and a holder of Capital Markets and Services License issued by the Securities Commission in Malaysia. Singapore: This material is issued and distributed in Singapore by Maybank KERPL (Co. Reg No 197201256N) which is regulated by the Monetary Authority of Singapore. Indonesia: PT Kim Eng Securities (“PTKES”) (Reg. No. KEP-251/PM/1992) is a member of the Indonesia Stock Exchange and is regulated by the BAPEPAM LK. Thailand: MBKET (Reg. No.0107545000314) is a member of the Stock Exchange of Thailand and is regulated by the Ministry of Finance and the Securities and Exchange Commission. Philippines:Maybank ATRKES (Reg. No.01-2004-00019) is a member of the Philippines Stock Exchange and is regulated by the Securities and Exchange Commission. Vietnam: Maybank Kim Eng Securities JSC (License Number: 71/UBCK-GP) is licensed under the State Securities Commission of Vietnam.Hong Kong: KESHK (Central Entity No AAD284) is regulated by the Securities and Futures Commission. India: Kim Eng Securities India Private Limited (“KESI”) is a participant of the National Stock Exchange of India Limited (Reg No: INF/INB 231452435) and the Bombay Stock Exchange (Reg. No. INF/INB 011452431) and is regulated by Securities and Exchange Board of India. KESI is also registered with SEBI as Category 1 Merchant Banker (Reg. No. INM 000011708) US: Maybank KESUSA is a member of/ and is authorized and regulated by the FINRA – Broker ID 27861. UK: Maybank KESL (Reg No 2377538) is authorized and regulated by the Financial Services Authority.
March 18, 2014 17
Malaysian Banks
Malaysia Maybank Investment Bank Berhad
(A Participating Organisation of
Bursa Malaysia Securities Berhad)
33rd Floor, MenaraMaybank,
100 JalanTun Perak,
50050 Kuala Lumpur
Tel: (603) 2059 1888;
Fax: (603) 2078 4194
Singapore Maybank Kim Eng Securities Pte Ltd
Maybank Kim Eng Research Pte Ltd
9 Temasek Boulevard
#39-00 Suntec Tower 2
Singapore 038989
Tel: (65) 6336 9090
Fax: (65) 6339 6003
London Maybank Kim Eng Securities
(London) Ltd
6/F, 20 St. Dunstan’s Hill
London EC3R 8HY, UK
Tel: (44) 20 7621 9298
Dealers’ Tel: (44) 20 7626 2828
Fax: (44) 20 7283 6674
New York Maybank Kim Eng Securities USA
Inc
777 Third Avenue, 21st Floor
New York, NY 10017, U.S.A.
Tel: (212) 688 8886
Fax: (212) 688 3500
Stockbroking Business:
Level 8, Tower C, DataranMaybank,
No.1, JalanMaarof
59000 Kuala Lumpur
Tel: (603) 2297 8888
Fax: (603) 2282 5136
Hong Kong Kim Eng Securities (HK) Ltd
Level 30,
Three Pacific Place,
1 Queen’s Road East,
Hong Kong
Tel: (852) 2268 0800
Fax: (852) 2877 0104
Indonesia PT Maybank Kim Eng Securities
Plaza Bapindo
Citibank Tower 17th Floor
Jl Jend. Sudirman Kav. 54-55
Jakarta 12190, Indonesia
Tel: (62) 21 2557 1188
Fax: (62) 21 2557 1189
India Kim Eng Securities India Pvt Ltd
2nd Floor, The International 16,
Maharishi Karve Road,
Churchgate Station,
Mumbai City - 400 020, India
Tel: (91).22.6623.2600
Fax: (91).22.6623.2604
Philippines Maybank ATR Kim Eng Securities Inc.
17/F, Tower One & Exchange Plaza
Ayala Triangle, Ayala Avenue
Makati City, Philippines 1200
Tel: (63) 2 849 8888
Fax: (63) 2 848 5738
Thailand Maybank Kim Eng Securities
(Thailand) Public Company Limited
999/9 The Offices at Central World,
20th - 21st Floor,
Rama 1 Road Pathumwan,
Bangkok 10330, Thailand
Tel: (66) 2 658 6817 (sales)
Tel: (66) 2 658 6801 (research)
Vietnam In association with
Maybank Kim Eng Securities JSC
1st Floor, 255 Tran Hung Dao St.
District 1
Ho Chi Minh City, Vietnam
Tel : (84) 844 555 888
Fax : (84) 838 38 66 39
Saudi Arabia In association with
Anfaal Capital
Villa 47, Tujjar Jeddah
Prince Mohammed bin Abdulaziz
Street P.O. Box 126575
Jeddah 21352
Tel: (966) 2 6068686
Fax: (966) 26068787
South Asia Sales Trading Kevin FOY
kevinfoy@maybank-ke.com.sg
Tel: (65) 6336-5157
US Toll Free: 1-866-406-7447
North Asia Sales Trading Alex TSUN
alextsun@kimeng.com.hk
Tel: (852) 2268 0228
US Toll Free: 1 877 837 7635
www.maybank-ke.com | www.maybank-keresearch.com
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