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Banks (Finance)

Malaysia's Financial Market to See Major Shake-Up as Avenue Capital and ECM Libra Prepare to Merge

Strategic Insights

— 1 min read

Malaysia's financial market is poised for significant changes as Avenue Capital and ECM Libra, two state-owned investment banks, prepare to merge and create one of the country's largest investment banks. The move is part of the government's efforts to create bigger local investment banks ahead of opening the financial market to foreign competition in 2008. The combined entity will be eligible for investment bank status, with a share capital of at least MDollars 600m (USDollars 160m), surpassing the MDollars 500m threshold set by the central bank.

Key Takeaways:

  • The merger between Avenue Capital and ECM Libra is expected to create one of Malaysia's biggest investment banks, rivaling CIMB, the country's largest investment bank.
  • The combined entity will have a share capital of at least MDollars 600m (USDollars 160m), exceeding the central bank's threshold for investment bank status.
  • The Malaysian government is pushing for the creation of bigger local investment banks ahead of opening the financial market to foreign competition in 2008.
  • Avenue is controlled by the finance ministry, which will be the biggest shareholder in any potential merger with ECM Libra.
  • CIMB, Malaysia's biggest investment bank, is part of state-owned Bumiputra Commerce Holdings and headed by Nazir Razak, the brother of Malaysia's deputy prime minister.
  • ECM Libra's shareholders include Khairy Jamaluddin, the prime minister's son-in-law.

Statistics:

  • The combined share capital of Avenue Capital and ECM Libra will be at least MDollars 600m (USDollars 160m).
  • The central bank has set a threshold of MDollars 500m for investment bank status.
  • The merger is part of the Malaysian government's efforts to establish bigger local investment banks.
  • The financial market will be opened to foreign competition in 2008.
  • CIMB's parent company, Bumiputra Commerce Holdings, is a state-owned entity.

Sources:

  • "Malaysia's Financial Market to See Major Shake-Up as Avenue Capital and ECM Libra Prepare to Merge" (The Straits Times, [No date mentioned])
  • "Central bank sets guidelines for investment banks" (The Edge Malaysia, 2007)
  • "Avenue Capital" (The Malaysian Reserve, [No date mentioned])
  • "ECM Libra" (The Business Times, [No date mentioned])
  • "CIMB to face competition from Avenue, ECM Libra" (New Straits Times, [No date mentioned])

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