HSBC: Capitalise on Chinese rail projects
Show that you are capable of being part of massive regional infrastructure development, says HSBC chief
LOCAL companies should find opportunities and capitalise on Chinese infrastructure projects that are planned in Malaysia and within the region.
HSBC Bank Malaysia Bhd in a briefing yesterday on the significance of Chinese investment, in particular to the Southeast Asian Railway Network (SARN), stressed that both the Malaysian government and entities would have a good slice of the pie from the projects.
“Chinese investment is not about the Chinese firms, but it is about the Malaysian companies that want to and are capable of being a part of a massive regional infrastructure project,” said HSBC Malaysia chief executive officer Mukhtar Hussain.
“In the case of SARN, which is expected to stretch over 3,000km and would run from Yunnan, China to Singapore, obviously, Malaysian firms would be needed to help build the portion that would cross through Malaysia because who would know the Malaysian terrain better than local firms?” he said.
When asked how would the bank benefit from this project, Mukhtar said HSBC was always looking at opportunities to provide financing, especially for large scale infrastructure projects.
“Our portfolio have typically consists of large scale infrastructure projects and we are hoping the firms that we have aligned ourselves with would be selected for some of the works,” said Mukhtar.
“HSBC, meanwhile, is a large global bank, with presence in China that dates back to over a century ago. With our global network and our existing capabilities in China, we are sure we would be able to provide the best kind of service to local firms that are looking to be part of this massive project,” he added.
Mukhtar noted that because of the scale of the project and the duration that it would take to be completed, project funding should ideally be done through sukuk issuances.
“Given Malaysia’s reputation as being the world’s premier hub for Islamic finance and its sophisticated sukuk market, we believe that sukuk would be an ideal choice for a project this size,” he said.
With a target completion of 2026, SARN will cut through China, Laos, Cambodia, Thailand, Singapore, Indonesia and Malaysia.
It is also one of the seven transport networks under China’s ambitious Belt and Road Initiative, which aims to create the “New Silk Road”, which is envisioned as a massive movement to better integrate, develop and boost trade between the countries of Europe and Asia.