KBank Links With Australian Group

SECURITIES TRADING
KBank links with Australian group
SUCHEERA PINIJPARAKARN
THE NATION

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Tightening business cooperation with allies is a key strategy for the financial sector to brace for the coming Asean connectivity, Kasi-kornbank president and chief executive officer Banthoon Lamsam said yesterday.

BANGKOK: -- KBank yesterday signed an exclusive strategic alliance agreement with Macquarie Group, Australia's No 1 investment bankers. They will cooperate in the financial and securities business and join hands in providing research studies to local investors and brokerages. The alliance will boost their combined market share of securities trading to the top two.

Banthoon said the bank would focus more on cross-border investment banking and securities operations in Asean countries. It will target medium-sized rather than large companies as clients, as the medium-sized ones still need information and financial consultants if they want to invest abroad while the large ones could explore outside the country by themselves.

He pointed out that Thai banks are unable to beat their main rivals from Malaysia and Singapore ahead of the upcoming AEC. Thai banks need to combine with strategic allies to ensure clients will gain most benefit from the services.

" The AEC is our focus as we look at many opportunities from the opening of the Asean market. However, we cannot go it alone as Thai banks are smaller than banks in Malaysia or Singa-pore. Having a strategic partner is the key to help KBank have an advantage in the arena," he said.

According to the first part of the agreement, KBank's subsidiary Kasi-korn Securities and Macquarie's subsidiary Macquarie Securities (Thai-land) will jointly provide researches, investment banking financial services, and brokerage services through KBank's securities arm, Kasikorn Securities (KSecurities). In the next stage, they will extend their cooperation to derivative products and business in private banking and the debt capital market.

"The cooperation would also encourage KBank to acquire securities businesses in Asean in the near future," he added. Under the agreement, Kasikorn Securities will change its symbol from "KSEC" to "KS-MACQ, effective from Monday. Macquarie Securities will send all of its securities orders to KS-MACQ and the brokerage income will be under revenue |sharing.

Nattharin Talthong, executive chairman, said that currently, KSecuri-ties had a market share of 3.29 per cent, and is ranked 13th in the local brokerage market, while Macquarie Securities (Thailand)'s brokerage trading has a 3.20-per-cent share of the market, and ranks 14th. After joining hands, they would have a combined market share of 6.49 per cent, jumping to second-largest in the market.

She said research was a high cost for brokerage operations and many houses had cut this cost in a bid to prepare for financial liberalisation. Yet KSecurities considers research important for clients. Macquarie's global insights will help add value to researches for investors to base their decisions on, she added.

KS-Macquarie's client coverage in financial and capital services will account for as much as 85 per cent of total market capitalisation.

She noted that the results of this agreement in the securities business will be reflected in revenue in 2013, when it estimates revenue growth not less than 30 per cent.