Religare to open Philippines investment banking unit

The Indian financial services group is putting emerging Asia at the centre of its international growth plans.

Religare, an Indian financial services group, has won a licence to set up an investment banking business in the Philippines.

The company said in a statement released yesterday that its capital markets arm had been awarded a representative licence by the local securities regulator. It said that its initial focus would be on equity markets and financing-related transactions for clients in the country, though its staffing plans are still uncertain.

“We are currently evaluating how to staff our business activities in the Philippines,” said the company in an email response. “We plan to make the necessary on the ground hires based on business activity we generate. Meanwhile, we will support our current business activity from our Hong Kong and Singapore offices.”

It has already won mandates in the Philippines, it says, including roles on STI Education Systems’ $65 million follow-on and a $50 million placement for PhilWeb.

The research team aims to cover 10 to 20 Philippine stocks in its first year.

“[This] latest expansion is a logical extension of the work we have been doing for our clients in the Philippines,” says Sutha Kandiah, head of investment banking at Religare. “We’ve seen the volume of transactions we handle for them increase in tandem with the growth of the Philippines economy.”

After the financial crisis, Religare set off on an aggressive bid to become a financial services supermarket, offering a range of products across asset management, insurance and capital markets (originally headquartered out of London), while also trying to win a domestic banking licence in India.

That expansion has led to big losses and a revaluation of its plans, resulting in a shift of focus away from costly investments in slow-growth developed markets. Instead, it is now keen to put emerging Asia at the centre of its growth ambitions — and the Philippines is an obvious strategic step.

“The [Philippines] is indeed one of the world’s unfolding success stories,” says Kandiah. “With strong economic growth between 6% and 7%, stable political situation and strong investment flows, the Philippines represent an attractive proposition to global investors.”

Today, Religare’s international businesses comprise an asset management arm and the capital markets business. Within Asia, it has a presence in Hong Kong, Indonesia, Japan, Malaysia, Singapore, Sri Lanka and throughout India.

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