ECM Libra regains lost ground

by **Cals** Mon 18 Aug 2014, 22:16

Business & Markets 2014

Written by Levina Lim of theedgemalaysia.com

Monday, 18 August 2014 09:30

KUALA LUMPUR: ECM Libra Financial Group Bhd has been quietly regaining lost ground over the past year. The sale of its investment banking arm had strapped the group down to a Practice Note 17 (PN17) status that was lifted on May 29.
“The PN17 itself created a very negative overhang on the company and we lost some AUM (assets under management) as a result. But we have [since] regained some ground,” group chief executive officer (CEO) Azlin Arshad told The Edge Financial Daily in an interview.
She said the group now targets to at least double its AUM by 2016, which is understandable as over 70% of ECM Libra’s total revenue was derived from its fund management business in the financial year ended Jan 31, 2014 (FY14).
While the PN17 status is usually associated with financially distressed companies, ECM Libra slipped into PN17 territory due to the divestment of its core business and key revenue contributor, ECM Investment Bank Bhd, to K&N Kenanga Holdings Bhd in December 2012.
Only after putting its team together, she noted, was ECM Libra able to concentrate fully on rebuilding its business.
“Now, we are really in a position to build the business. [Back then] it [was] almost like we were starting from scratch. We’re fortunate though, as we had our fund management company,” she said.
The group has augmented its fund management business through a more organised marketing structure via the setting up of an agency, with a stronger focus on attracting private mandates.
Azlin said ECM Libra is currently concentrating on expanding its private mandate business, which is defined as high net worth clients with deposits of RM1 million and above.
“Private mandates [were] not something that we had concentrated on before. It is a real focus area now,” she said.
Azlin said ECM Libra’s balance sheet is “very clean” and its assets easily liquidised should there be a need, although substantial shareholders have not indicated an intention to privatise the group.
CIMB Research analyst Winson Ng said he does not discount the possibility of a privatisation as ECM Libra is trading below its book value and is churning out a profit.
“Assuming it is taken private at 0.8 times book value, we would be looking at an offer price of RM1.24 per share, translating into a potential upside of 23%,” he said in a June report, when ECM Libra was trading at RM1.01. ECM Libra closed unchanged at RM1.03 last Friday, bringing its market capitalisation to RM277.29 million.
The group posted a net profit of RM2.56 million in the first quarter ended April 30 (1QFY15), which was 46.22% lower than the RM4.76 million recorded in 1QFY14. Revenue for 1QFY15 came to RM9.31 million, down 35.23% from RM9.31 million earlier.
Other than its fund management business, the group is also looking at expanding its corporate finance advisory business, for which it is currently applying for a licence from the Securities Commission Malaysia (SC).
“The advisory business right now is not under the licensing activity under the Capital Markets and Services Act 2007 because we have not [received] approval from the SC yet for the variation of the licence from investment advisory to corporate finance advisory.
“But once we get that, we will be able to go full swing into generating revenue from corporate finance advisory,” said Azlin.
On whether the group is looking for any potential acquisitions, she said: “There is nothing concrete, but we are looking and continuing to explore possible acquisitions. When we explore, it’s not just about whether it makes business sense or not, but also whether it’s something the market is receptive to.”

This article first appeared in The Edge Financial Daily, on August 18, 2014.

by **Cals** Mon 18 Aug 2014, 22:17

Correction ECM Libra regains lost ground

Business & Markets 2014

Written by theedgemalaysia.com

Monday, 18 August 2014 14:22

KUALA LUMPUR (Aug 18): We refer to “ECM Libra regains lost ground” (The Edge Financial Daily, Aug 18), which had stated that, “Following the disposal, the group suffered a setback when several senior management personnel, including its then CEO Lim Kian Onn, left the company.”
We wish to clarify that it was the CEO of Libra Invest Bhd who left, and not Lim.
Lim is currently non-independent non-executive director of ECM Libra Financial Group Bhd.
The error is regretted.

ECM Libra regains lost ground

ECM Libra regains lost ground

Re: ECM Libra regains lost ground