KENANGA MANAGING DIRECTOR'S MANAGEMENT DISCUSSION AND ANALYSIS

GROUP MANAGING DIRECTOR’S MANAGEMENT DISCUSSION & ANALYSIS Malaysian REIT for which the division played a significant role. Further to these, the Division continued to spearhead Redeemable Convertible Note (“ RCN ”) origination with four new issuances and completed several significant Merger and Acquisition (“ M&A ”) advisory transactions. Successful Islamic equity products that were launched included the Redeemable Convertible Cumulative Preference Shares (“ RCPS-i ”) and Redeemable Convertible Unsecured Islamic Debt Securities (“ RCUIDS ”). Treasury The Treasury division recorded a strong performance in FYE2019 with a PBT of RM12.0 million against PBT of RM2.0 million in the previous year. This was primarily driven by improved trading and investment income from its bond portfolio. The division proved resilient against volatile market conditions, boosted by the positive bond market performance, despite Malaysian bonds being retained on a FTSE Russell watch list for exclusion from the FTSE World Government Bond Index. The volume of retail Negotiable Instruments of Deposit rose to an average of RM52 million during the year, compared to RM45 million in 2018, increasing further our presence in the retail deposit market. Treasury was able to maintain a stable funding structure, enhancing the bank’s short term resilience, as well as resilience over a longer time horizon, resulting in our Liquidity Coverage Ratio remaining above 120%, well beyond the regulatory requirement of 100%, whilst Net Stable Funding Ratio averaged above 100% for the year. Nonetheless, the division achieved a feather in its cap with the listing of Supreme Consolidated Resources Berhad in January 2019 - the first Sarawak-based company to be listed on the LEAP Market. During the year, the IB division also participated as a Joint Underwriter for the Initial Public Offering (“ IPO ”) of Leong Hup International Berhad, which raised RM275 million from its re-listing on the Main Market. In the debt capital market, the IB Division launched a Medium-Term Note (“ MTN ”) Programme for Seri Mutiara Development Sdn Bhd. It also achieved another first with the launch of a Commercial Paper/ MTN Programme for Urban DNA Sdn Bhd, which were secured against residential property units. The Programme provides investors with the option to purchase the secured properties, which is unprecedented in the market. The launch of Sunway REIT’s Perpetual Note Programme, was another first-of-its-kind by a Segmental Review: Investment Management Kenanga Investors Group (“ KIG ”), which is comprised of Kenanga Investors Berhad (“ KIB ”), Kenanga Islamic Investors Berhad (“ KIIB ”) and Libra Invest Berhad (“ LIB ”), saw its PBT grow to RM6.2 million for the FYE2019, from RM2.24 million in 2018. KIG’s total AUM increased to RM13.49 billion from RM7.86 billion in 2018. The increase in both PBT and AUM can be attributed to our long-term strategy to build multiple distribution channels over the last few years. KIG’s burgeoning private wealth segment which was established in 2016 has surpassed its growth trajectory for this financial year, while other channels such as the retail, corporate and institutional segments continued to see growth despite a volatile year. The continued launch of new alternative strategies and products has also been imperative in carving out KIG’s presence in the market as a wealth manager with our foray into alternative investment space. The products saw us launching many first- in-the-market solutions for our clients ranging from high-yield to equity-linked structures. One of our conspicuous launches in 2019 which saw over RM150 million in funds raised was our Kenanga Global Unicorn 1 and 2. The funds aimed to provide medium- term capital appreciation by investing primarily in the securities of globally recognised, ‘near-term IPO’ ready, technology companies, valued at over USD1 billion. The Kenanga Global Unicorn series succeeded in bridging the gap between qualified investors and the international startup community with the first series oversubscribed.