CIMB: Asean must tell better stories to attract global capital

Borneo Post

4 days ago

Novan says Asean markets are filled with strong companies and promising ideas but these have not been highlighted effectively on the global stage.
KUALA LUMPUR (July 23): Asean companies and economies must do a better job of telling their success stories if the region wants to attract more global capital, said CIMB Group Holdings Bhd (CIMB) chief executive officer Novan Amirudin.
He said the region has strong fundamentals such as a young population, a rising middle class, fast gross domestic product (GDP) growth and steady inflows of foreign direct investment.
However, these strengths have not been translated into global investor confidence because Asean has not promoted its investment potential well enough, according to Novan.
'We all know the benefits of Asean. But the one thing that Asean hasn't done enough is storytelling.
'There's a lot of investment proposition (in the region). But we haven't been telling enough stories about what is available here,' he said during the bank's Asean Media Day earlier this week at its headquarters.
He said Asean markets are filled with strong companies and promising ideas but these have not been highlighted effectively on the global stage.
Instead, he said capital continues to flow to the United States where companies are backed by compelling narratives.
'Malaysia has 30 million people and the US has 300 million, about ten times more. But the market cap of the US is 140 times larger than Bursa Malaysia. It just doesn't make sense,' he said.
He said the large gap exists because a significant amount of capital is currently parked in the US market.
He explained that the size of the US capital market is driven not just by economic strength but by compelling stories that attract long-term investments. Companies there are able to communicate their value, vision and potential that resonate with global investors.
Novan noted that the US financial markets currently hold close to US$30 trillion in foreign-owned assets, with about US$6 trillion coming from East Asian governments and economies.
He said the current geopolitical climate is pushing some of that capital to look for new destinations.
'We in Asean must make sure we are ready to capture our fair share of that capital,' he added.
However, he warned that any story told to the market must be backed by strong delivery.
'The last thing we want is to promote stories we can't execute. That will drive capital away instead of attracting it,' he said.