2007 marked the first year that KIBB operated as a full fledged investment bank. Its main income contributors would be from equity broking and originations for all investment banking products and services and advisory services in both the equity and debt markets.
In late 2006, the Malaysian stock market experienced a surge in trading values averaging monthly values of about RM65billion compared to monthly average trading values experienced prior to November 2006 of RM42billion. The upward trend in trading values continued in 2007, averaging RM97billion a month.
Accordingly, KIBB's equity broking division experienced an average increase in its market share of about 12% in 2007 resulting in it being the major contributor to the Group’s revenue and profit for the year of more than 75%.
2007 was a volatile and difficult year globally and the Malaysian economy was not spared. The external uncertainties arising from the subprime housing mortgage crisis in the United States created turmoil in the global financial markets coupled with the fear of inflationary pressures following crude oil prices hitting an all time high above USD100.
Since attaining the investment banking status, the bank has been actively pursuing various mandates to build up its business franchise.
Whilst the competitive landscape for domestic investment banking is expected to intensify with the entrance of foreign players following liberalisation and the transformation of other local institutions into investment banks, the bank is confident that it will be able to secure more mandates going forward given that the Malaysian economy is expected to continue to strengthen, between 5% to 6% with positive contribution from all sectors of the economy and the implementation of the 9th Malaysian Plan Construction Projects gaining momentum in 2008.
