Temasek unit eyes Myanmar opportunities. Fullerton Financial may make foray there as early as next year.

04 October 2013

TEMASEK Holdings unit Fullerton Financial Holdings is eyeing investment opportunities in Myanmar following its pioneering foray into Cambodia last week.

Fullerton Financial chief executive Gan Chee Yen told The Straits Times recently: "We are looking at Myanmar, we're learning how to operate there. (It is) a market which obviously has potential and we certainly would not choose to ignore it."

The Straits Times understands that this expansion could come as soon as early next year. If successful, it may mark Temasek's first steps in Myanmar as the Singapore agency has no investments there currently.

Fullerton Financial, which invests in financial institutions in emerging markets, has holdings in countries such as Indonesia, China and India. Its total assets around Asia stood at $40.9 billion as at Dec 31 last year.

CIMB regional economist Song Seng Wun said: "Indochina's a region with relatively unexplored growth potential in our backyard. The Myanmar government is taking steps to encourage foreign investments, tweaking its laws to make it attractive."

Last week, Fullerton Financial joined two Cambodian partners in opening a new bank - Cambodia Post Bank - to serve the mass market and small businesses there.

It is Temasek's maiden investment there and it also marks the first large-scale Singapore involvement in Cambodia's banking sector.

Mr Gan said: "When we look at Cambodia, we're not looking just at Cambodia but we're looking at the whole Indochina region.

"We want to see how we can expand our investments in this part of the world."

Fullerton Financial established a foothold in Indochina in 2010, taking a stake in Mekong Development Bank - a joint-stock commercial bank headquartered in Ho Chi Minh City, Vietnam.

Mr Gan explained that its success with Indonesia's Bank Danamon, in which it invested in 2003, can be repeated in other parts of Asia.

A lot of the expertise from that Indonesian investment has been taken to other countries such as China and India, he noted.

He added: "We hope to replicate what we've learnt in Indonesia, tweaking to local customs and credit culture. It's something which has proven to be profitable in Indonesia, and that can be replicated elsewhere in Asia."

The overall aim is to build up his firm's expertise across Asia.

Fullerton Financial holds stakes in China Construction Bank and Bank of China. It also runs Fullerton India and Fullerton Credit in China, specialising in mass-market and small business financing.

"We can do more in China and India. While we're big in Indonesia, we can do more in the rest of South-east Asia as well," Mr Gan said.

The recent emerging market crisis has not dampened the firm's appetite for expansion.

Mr Gan said: "We've always been prudent in managing our entities with a view of being able to ride through crises... The key is to anticipate early the issues, the problems, and to manage the business accordingly."