Y.Bhg. Tan Sri Dato’ Azman Hashim
Chairman, Malaysian Investment Banking Association
 
YBhg Tan Sri Azlan Zainol,
Chief Executive Officer, Employee Provident Fund
and YBhg Puan Sri

YBhg Jalilah Baba
Director-General from MIDA

YBhg Dato’ Sri Abdul Wahid Omar
Chairman of Association of Banks in Malaysia
and YBhg Datin Sri

YBhg Datuk Ranjit Ajit Singh
Managing Director and Executive Director, Market Supervision, Securities Commission
and Datin

Tan Sri and Dato’-Dato’ Chairmen, Managing Directors and Chief Executive Officers of Investment Banks, Distinguished Guests,

Ladies and Gentlemen

Assalamualaikum Warahmatullahi Wabarakatuh 

1.    I thank Malaysian Investment Banking Association (MIBA) for inviting my wife, Fauziah and I to this evening’s Annual Dinner. I am very happy to be here tonight, returning to my roots, so to speak.

2.    When I first began my career some twenty-five years ago, there was no such thing as investment banks, they were known as “merchant banks”. I was with Bumiputra Merchant Bankers, then Asiavest Merchant Bank and later Chase Manhattan. Of all the many people that I knew then, tonight, I can only recognise Tan Sri Azman Hashim. Tan Sri, you have been a pillar, indeed, a recognised statesman, to the Malaysian capital markets. Tan Sri, your service to the Nation has been exemplary. Thank you, Tan Sri.

3.    This dinner also celebrates the conclusion of MIBA Games 2009. I would also like to congratulate all athletes for having participated successfully in this year’s games. I am certain the spirit of cooperation, sportsmanship and goodwill forged among members in the investment banking fraternity is further strengthened. 

Ladies and Gentlemen

4.    Having been to the IMF/World Bank Meeting not more than two months ago and more recently, APEC Singapore last week, the prognosis of the global economy can be best described as “cautiously optimistic”. Nevertheless, at last Thursday’s Economic Council meeting chaired by the Prime Minister, we are looking at various ways to revise our initial GDP growth target of 3.0% upwards.

5.    We have identified several sources of growth and we will enhance our capacity through domestic demand. We are also looking to strengthen the private sector’s contribution to the GDP through the Government-linked companies.  There are several projects in the pipeline and we will bring them forward for implementation in the first quarter of next year. We are now reasonably confident that a revised target of 5.0% is achievable.

6.    Moving forward in the medium term, one of our primary focus areas would be to revitalise private initiative. We will improve internal competition in the marketplace, focus on technology and innovation in niche areas including green and bio technologies. We will develop these niches on existing comparative advantages and provide soft & hard infrastructure for the knowledge economy.

7.    With all these, we will create new catalysts of growth, boost demand for knowledge workers and skilled labour, raise private and social returns to education and skills upgrading, and a more balanced internal economic structure with a bigger role for domestic demand. Externally, we will also continue to further promote closer economic, trade and financial linkages within the region.

Ladies and gentlemen

8.    In our quest for new sources of growth to achieve our vision to develop a high income economy, the Government will soon launch the new economic model . The new economic model will be made operational through the 10th Malaysian Plan which will be launched next year. We want to promote broad-based investment in human capital, push our private sector to move up the value chain and spur innovation and creativity.

9.    Within this context, we identify the domestic financial industry as one of the primary contributors to the growth of our new service economy. In this regard, we already possess a proud body of work, especially in our Islamic capital market. Indeed, Malaysia’s one truly definitive and competitive value proposition to the world is Islamic finance. However, in the last several years we are seeing established international financial houses entering the market aggressively, here and abroad. If Malaysia wishes to retain its pole position in Islamic finance, our financial institutions need to expand its geographic market coverage as well as its product and service offerings.

10.    In this context, Bank Negara, the Securities Commission and Bursa Malaysia have done much to create a most conducive eco-system for Islamic finance to grow. Last week, I had the privilege of witnessing the signing of an agreement between our Securities Commission and its Hong Kong counterpart. There will be mutual recognition of investment products including Islamic investment schemes from one jurisdiction by the other. I have no doubt that there will be a greater flow of products from Malaysian financial institutions into Hong Kong as opposed to Hong Kong-made products selling into our market.

11.    In the same breath, I would also like to say that I have every confidence our financial institutions have what it takes to become regional champions. The Malaysian experience in developing its capital market in the last twenty years has equipped our bankers with a wealth of skill sets which can be proven useful elsewhere in the region. I believe the leaders of the Malaysian financial industry have the vision and foresight to identify these areas, develop the necessary talents to manage  new businesses and build strong franchises within the regional business communities.

12.    In this regard, the Ministers of Finance of ASEAN has formed the ASEAN Capital Markets Forum (ACMF) – a grouping of heads of the region’s securities regulatory authorities. ACMF has developed an implementation plan to promote greater integration of the region’s capital markets. Market players will be able to operate and cross sell their products in a mutually recognised regulatory environment across a number of national jurisdictions and facilitate cross-border fund raising activities.

Ladies and gentlemen,

13.    The 1990s is now looked upon as a golden decade for the Malaysian capital market. There were major IPOs as the result of the Government’s privatisation programme. The Kuala Lumpur Composite Index (KLCI) consistently hit new highs. Malaysia was an Asian Tiger Economy. Things have changed now. We have to work harder for our money. We do not want to be the tiger that lost its roar.

14.    By and large, we have had things relatively easy. Nevertheless, history can teach us a few lessons. We have seen how some financial institutions emerge as champions, while others disappear as heroes of a lost era. A quarter of a century ago, when I was a young executive, there were merchant banks that bore proud English names. Most are no longer with us. They could not compete with the dynamics of a changing world.

15.    Under the leadership of our Prime Minister, this Government is determined the transformation of our country into a high income economy realised. In his private pronouncements and in his public declarations, his words are ringed with determination. For the days ahead, I know we have the support from all of you, for all of us have our roles to play and as intermediaries for our capital market, your role is critical.

16.    Change we must. The need for us to change goes beyond the survival of our jobs and our immediate financial security. There is a bigger picture. We need to change because the future of our children is at stake. Within the next decade, we must successfully lay the pillars and foundations of our new economy. It must be an economy where our children, our future generation, yours and mine, can thrive and effectively compete with their global peers. With our joint prayers and God’s grace, God willing, we shall succeed.


17.    My thanks to Tan Sri Azman Hashim for his gracious invitation for my wife and I to be here with all of you tonight. The honour and pleasure are singularly ours. I congratulate MIBA for having organised this wonderful dinner and, of course, well done on the successful conclusion of the MIBA Games 2009. Please enjoy your evening. I know my wife and I will.

Thank you.