BMCs-Best Execs-r2:AMM grid in qxp 12/24/09 9:42 AM Page 58
AWARDS
“I’mimpressedbytheirabilitytosecurenewcontractsoverseas,” ItwasperhapsthedefiningmomentinConner’sseven-yeartenure
saysanotherseniorsource. asOCBC’schief.AlthoughmanyanalystsbelieveOCBCoverpaid,they
Hyflux’saggressivepushoverseashadatonetimeworriedahead credithimandhismanagersfordaringtomakeamovethatgivesthe
ofresearchinSingapore,butitsresultshaveconvincedhimthatthe bankaregionalfootprintinalucrativebusiness.
companyknowswhatit’sdoing. “Thisacquisitionisagoodmoveandonethatrarelycomesby,”notes
“WhenIthinkabouttheprojectscomingthroughandthegeo- aheadofresearchataninternationalfirminSingapore.“Althoughthey
graphicalcoveragethattheyhavetolookat,itallstartsmaking didoverpay,ittakesgutstodosuchalargedealduringafinancialcri-
sense,”hesaid. sis.”
Analystsbelievethecompanyispositionedtodowellinthe Anothersourceadded:“It’sthemsayingwithconvictionthat‘we’re
longerterm.Itoperatesinarelativelyunder-investedindustrywhich goingoutanddoingthis.Itwillcostusalotofmoney,butitmeanswe
offersplentyofpotential.Also,asthecostoftechnologycomes cangrowourbusinessinthelongerterm’.”
down,thedemandforHyflux’sproductsandexpertiseisonlylikely AnalystsalsolaudConner’seffortstoimprovecreditstandardsand
togrow. increaseprofitability.
“Everytimeyoumakeaquantumleapinthecoststructureyou’ll Underhisleadership,OCBChasshiftedawayfromrelativelylow-
enticeothercustomerstocomein,sothelong-termviewisquite marginbusinessestohigherprofitonessuchasservicingsmalland
strong,”theheadofresearchsaid. medium-sizedenterprises.Andhehasspearheadedschemestokeep
clientfundswithOCBC,enablingittoenjoylowerfunding.
“Davidhasalsoinstitutedanumberofcreditprocesseswhichhave
LARGE-CAPCORPORATEOFTHEYEAR resultedinverygoodcredit,”saysthebankinganalyst.“Theyhavealow
OlamInternational non-performingloansratiointhiscrisisandlowprovisioning,which
reflectsthecreditprocesseshehasdoneoverthelastfewyears.”
AllthishashelpedOCBCdowell.Itreporteda12%year-on-year
AgriculturalcommoditiessupplierOlamInternationalhashada increaseinnetprofittoS$450millionduringthethreemonthsto
testingyear,butithasemergedfromthecrisisstronger.Oneofthe September.
toughestchallengesitfacedwaswhencreditmarketsfrozeup,
threateningitsabilitytoobtainfunding.
Thefirmreliesonsuchfundingforalotofitsworkingcapital. TAIWAN
Butthefactthatbankersdidnotshyawayfromit,eventhoughitis
consideredhighlyleveraged,isanodtoitsreputationasasavvy SMALL-CAPCORPORATEOFTHEYEAR
manager. KGISecurities
“Theymanagedtogettheircreditlinesexpandedthisyear,which
isverygoodforacompanythatisn’trated,”saysanindustryanalyst.
“Ifacompanythatisconsideredhighlyleveragedcanstillget KGISecuritiesissteadilybecomingahouseholdnameinTaiwan,cour-
creditwhensomeofthelargecompaniesratedAAAcouldn’twhen tesyofitsacquisitionofTaishinSecuritiesinMay.Thepurchasemadeit
thecreditmarketfrozeup,youknowforafactthatbankersarefairly theisland’ssecond-largestbrokeragebehindYuantaSecurities.
comfortablewiththeirbalancesheet.” Succeedinginthebidwasnoeasytask.Taiwanwasembroiledinthe
TemasekHoldings,Singapore’sstate-ownedinvestmentcompa- globalfinancialcrisis,andYuantawasalsokeentosnapupitsrivaldur-
ny,alsothoughtso.Itboughta13.76%stakeinthefirmforS$437.5 ingthebiddingprocess.
millioninJune. InvestorsinitiallyquestionedwhethertheNT$29billion(US$900
Thisgivesaboosttothecompany’snewstrategy,whichit million)thatKGIpaidtosecureTaishinSecuritieswastoomuch.
announcedthisyear,ofexpandingintotheupstreamanddown- Butthetakeoverhashelpedthesecuritiescompanytomorethan
streampartofthevaluechainincommodities. doubleitsmarketshareto8.3%,accordingtodatafromtheTaiwan
Analystshaveapplaudedthemove.“Ithinkit’saneededchange SecuritiesAssociation.Thathasleftitwell-placedinanindustrythat
instrategy,”saystheanalyst. hasmorethan150brokeragesandisripeforconsolidation.
“Thecurrentmodelforgrowthhasalreadyreachedsaturation “Taiwan’sbrokerageindustryisveryfragmentedandbrokerages
andthey’releadersornear-leadersinmanymarkets,sotheincre- needtobecomebiggertobecomelessvulnerable,”saidoneTaipei-
mentalgrowthfromherewouldbeharder.Movingupstreamor basedinvestor.
downstreamallowsthemtocapturealargersliceofthevalue TheTaishinacquisitionhasnotonlyseeminglysecuredKGI’sfuture
chain.” duringatimeofupheaval,italsoplacesthebrokerageasthemainchal-
Ithasmovedquickly.Itacquired14.35%ofNewZealand lengertoYuanta.ObserversarewatchingkeenlytoseewhetherKGIcan
FarmingSystemsUruguayandalsoalmondassetsinAustralia. capitaliseonitsacquisitionin2010.
“Theyarelookingbeyondthree-to-fiveyearsandIthinkthatis Anenticingprospectiswhetheritcanallyitselfwithanothersecuri-
impressiveintheirvisionandforesight,”saysaheadofresearch. tiesfirmwithwhichitsharesacommonparent.KGIismajority-owned
byAngeloKoooftheKoofamily,whichalsocontrolsChina
DevelopmentFinancialHolding.
BESTEXECUTIVE AcombinationofKGI,TaishinandChinaDevelopment’sGrand
DavidConner,chiefexecutive,OCBC CathaySecuritieswouldformabrokeragewithamarketshareof
around12%,roughlythesameasYuanta’s.
AsidefromKGI’sonshoreprospects,thecompanyhasalsoprovento
AregionalbankinganalystinSingaporedescribedDavidConneras beinternationallyastute.Awareofitslimitations,thebrokeragerefused
verywellregardedandhavingdoneafantasticjob.“Ithinkyou’ll toexpandtooaggressivelyintherestofAsia,choosinginsteadtofocus
findalotofresonance,”headded. ondevelopinginHongKongandThailand.
ThechiefexecutiveofOCBChasbeeninthenewsalotforthe ThisdisciplinedapproachhasleftKGIlessexposedtotheglobal
bank’sgutsymovetobuyING’sAsianprivatebankingbusinessfor financialcrisisthancompetitorswhosecorporateeyesprovedbigger
US$1.46billion.ThiswasatransformationaldealforOCBCasit thantheirstomachs.
morethantriplesitsprivateclientassetstoUS$23billion.
58 DEC2009/JAN2010 ASIAMONEY
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