Maybank Securities positive on MAS equities review given niche in mid-cap players: CEO Aditya Laroia
The review – which focuses on small to mid-cap companies in the city-state – will support a segment that 'doesn't get the right attention, but has a lot of value', Laroia said in an interview with The Business Times.
In particular for the investment bank, whose niche is in the mid-cap segment, the review should present broad-based growth opportunities.
'The genuineness with which MAS (Monetary Authority of Singapore) is approaching this seems quite refreshing,' Laroia said.
Maybank Securities in recent years has pivoted from only covering large caps, to allocating a 'significant amount of attention' from its research arm to small and mid-cap players.
Currently, around 30 to 35 per cent of its coverage is in mid-cap names, of which it has buy calls on around 65 per cent of them.
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'The bedrock of our Singapore business is to make sure retail clients are well-informed,' Laroia said.
'That's why people like us are focusing on coverage and research and bringing what is diamond-in-the-rough kind of opportunities to investors. You need an active retail investor base to be quite active,' he added.
A strong retail interest will help attract institutional investors, which in turn will boost a market that is already attractive but just missing liquidity, the CEO said.
But retail investors also need to see commitment from the government, such as through sovereign wealth funds.
With the MAS review in motion, Laroia said the investment bank is seeing deals in the pipeline that have benefited from improvements in the approval system, and the commitment to turn-around.
He also expects more positive change when capital from the review gets deployed – for example, through the S$5 billion equity development market programme or the changes to the Global Investors Programme.
'Overall, I think clients will feel much more positive about approaching capital markets once these things are starting to be in full flow,' he said.
Growth engines
In the meantime, Laroia continues to see growth drivers across Maybank Securities' business segments.
For its institutional business, Singapore remains the gateway from the West to the East.
'This is where it is easiest to attract capital, and has the most defined legal framework structure,' he said. 'All the insecurities an investor can have coming into Asia are essentially overcome by having existence in Singapore.'
For example, most of Maybank Securities' international clients contract with its Singapore entity so that they do not have to get into the complexity of local laws and rules in the various Asean markets.
This is in part supported by the company's strength in the region. He said: 'We don't just market Singapore, we market Asean along with Singapore, which becomes quite an important service for all the global institutional asset managers.'
For its wealth management business, Laroia said the wealth coming into the Republic is looking for more tech, automation and capability.
'Between us and the bank, we are able to offer a front-to-back solution to a lot of the independent wealth management companies, from bank accounts to trading to financing to custody,' he said.
As for its investment banking business, it is also targeting private equity clients that need debt capital market solutions in Asean.
Furthermore, the investment bank is the only one that has South-east Asian heritage to launch a hedge fund-focused business, the CEO said.
The segment – which operates under the 'prime brokerage' brand – services new and early stage managers, which may not be supported by larger providers as these managers may lack scale.
Commenting on the trend of delistings, Laroia said the problem is 'not a Singapore-only phenomenon', and merely a sign that the capital markets ecosystem has transformed.
'It's not always a bad thing for those of us who want to support the public ecosystem,' he said.
'Obviously we don't like to see delistings, but you also want to see names on the exchange that are strong and support the exchange valuation,' he added.
Trump impact
While Maybank Securities may have all the growth drivers ready, Laroia said markets remain wary amid market uncertainty caused by US trade policies.
'I'm almost certain that 2025 would have been a much stronger year, barring tariffs and (Donald) Trump, because clients are a bit freaked out also as to what's happening in the market,' he said.
Nevertheless, he noted optimism from client conversations surrounding the MAS equities review.
Maybank Securities' pipeline also 'looks a lot stronger than it has historically', with around 65 to 70 per cent of its deals comprising mid-cap names.
For now, Laroia remains positive, especially since the equities review is set to be a long-term plan.
'If it is designed the way it is designed, it will play out to benefit the overall pipeline across the street... barring Trump, over the course of the next couple of years, I'm very confident that things will turn around.'
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