TA looking to expand stockbroking business
> Plans to set up more branches and increase fee-based activities to boost profits
KUALA LUMPUR: TA Enterprise Bhd does not plan to sell its stockbroking business just yet despite a challenging market landscape, but will seek to expand the business by setting up branches and increasing its feebased activities to boost profits.
Managing director and CEO Datin Alicia Tiah said stockbroking used to be a major contributor (80%) to the group’s bottom line but now its contribution stands at only 20%, even though it is still profitable.
“We have a fair share of institutional clients and we have a corporate finance team to give us fee-based income. We’re quite comfortable to be able to earn RM20 million a year from this line of business, which is a cash cow for the group,” she told a press conference after TA Enterprise and its 63%-owned TA Global Bhd’s AGM here yesterday.
Interest in TA Enterprise and the potential sale of its stockbroking arm TA Securities Holdings Bhd has continued to surface over the last few years, but the group had denied any plans for such a disposal, including to K&N Kenanga Holdings Bhd.
“We’re looking at expanding branches and we’ll close branches that are not profitable and we’ll go to areas that we think can grow. We also hope to have some feebased income and another way of growing is to train our people to do proprietary trading. I believe TA, after 40 years in stockbrocking, has the expertise,” said Tiah.
The group will be closing its Kuching branch but last year opened branches in Segamat, Malacca and Penang.
Tiah added that property development is a long gestation business that requires planning, acquisition of land, approval, building, collecting progressive payment from purchasers and in the end, the bulk of the profit can only come in when the group deliver the properties.
“It (stockbroking) is a good combination with (property) development because property at least gives us the cash flow every month without fail,” she said.
Tiah, however, said that the stockbroking business is facing shrinking commission fees and lesser retail participation.
“So far we’ve loyal clients and remisiers. It’s challenging this year,” said Tiah.
Meanwhile, Tiah said its property development and property investments arm TA Global contributes 65% to the group’s profit and it intends to further expand into Australia and Canada for property development and hotel operations.
The group has been in both markets for over 10 years, with a portfolio consisting of the Little Bay Residential Development project in Sydney and the Trump International Hotel & Tower Vancouver in Vancouver.
“We would want to buy, whether it is land or hotel, when we see a good deal (there),” Tiah said.
She added that there is a shortage of housing in Sydney and Vancouver and that the rental market is good there.
The group is also embarking on refurbishment of its properties, including in Australia (AU$14.5 million exercise to be completed in June 2016), China (RMB20 million exercise) to be completed in September 2015, Singapore (S$32 million exercise to be completed in end-2016) and Thailand (83 million baht exercise that is completed).