Kenanga Research: Corporations need to avoid ‘me-too’ mindset
KUCHING: In terms of positioning and strategy, researchers advise Malaysian corporates and startups not to adopt a ‘me-too’ mindset, emulating directly the successful US techs as we lack the advantage of scale, scope, knowledge and research that the US possess to win in the global stage.
“Instead we should be differentiators or nicheseekers, capitalising on our local knowledge that is unique to our environment to succeed, in ways that some the old-world names like Genting, Axiata and CIMB have succeeded domestically before venturing globally,” commented the team at Kenanga Investment Bank Bhd (Kenanga Research).
The research firm’s analysis came from its discussions with industry observer Tan Sri Andrew Sheng for a glimpse of how he views and analyses topical issues of interest.
“More recently, the likes of Grab having successfully adapted its business model to local conditions has struck partnerships with global brands. The five most popular and best performing American tech companies are investing in funds of funds funding new unicorns and sharing technology.
“The key to success is investing in local knowledge and not in being a follower. How to grow the next generation of Unicorns? Economies in the region should
offer unique values instead of being a me-too follower,” it explained.
“Bursa Malaysia will rise if Malaysian companies can offer unique values for it makes sense to differentiate if we cannot compete on speed, scale and scope with the likes of the US, China or multinational corporations in liquid indices.
“That said, globalisation is still relevant despite a world marred by Covid and unhealthy geopolitics. Today there are niche markets in smaller countries
for Malaysia where Malaysian products have penetrated. Corporates don’t need to sell to the entire world but can be successful if they can find enough small niche markets to sell to.”
Looking at the region, Kenanga Research noted that lots of money are in East Asia but lacks investment opportunities.
“Who are the investors? There are US$42.7 trillion investment funds worldwide and growing. Central banks account for US$15 trillion, pension funds US$18
trillion, and sovereign wealth funds US$9 trillion,” Kenanga Research said.
“Meanwhile, Middle East countries, Indonesia and Vietnam are creating sovereign wealth funds. Looking for better returns, the Norway Fund with 72 per cent invested in equity because of low interest rates, is allocating more to Asia Pac and EM Asia. “With so much public funds, it is not so much a lack of funds as it is about a lack of good projects (including ESG projects) that is a concern here in EM Asia.”