EFFECTIVE MEASURES: In doing business amidst very challenging times, Akmal underlines the need for management of organisations to run through all aspects of their business with a fine-toothed comb in identifying areas for improvement, and addressing them quickly.
KUCHING: Corporate, institutional cash management remains one of the most efficient — but untapped — channels to optimise non-core corporate funds.
The past month has seen extreme volatility in global markets, arising from debt woes in Europe and the US. The nation while regarded as a generally resilient market by itself, has not been spared from the repercussions.
The situation also had both retail and corporate investors being tested, creating doubts as to whether their funds or investments would be in the best of positions during such troubled times.
“We are doing business in very challenging times,” said chief executive officer of the Asian Islamic Investment Management Sdn Bhd (AIIMAN), Akmal Hassan to The Borneo Post via e-mail.
“As such, management of organisations need to run through all aspects of their businesses with a fine-toothed comb to identify areas for improvement and address them quickly,” he added.
As a key Islamic investment management company, AIIMAN highlighted the opportunity for companies, institutions, and even high net-worth individuals operating businesses, to consider the option of outsourcing their short-term cash management or treasury function to external fund managers in such instances.
“Cash management is one area that can be enhanced fairly easily by way of outsourcing the management of the funds to external fund managers,” Akmal pointed out.
He added that the constraints in terms of limited time and effective resource that should be dedicated to manage this function could be addressed, as external fund managers would comprise a team of professionals solely dedicated to managing funds.
As such, the managers would be in the forefront in identifying investment opportunities and obtaining first-hand information critical to investing successfully.
Elaborating further, Akmal explained, “The current practice for companies or institutions is either to place their short-term funds in fixed deposits, or buy directly into money-market instruments.
“The challenge with the former is the inflexible lock up periods while the latter carries concentration risk by means of lack of diversification due to the sheer size required to enter the money-market.
“The function of the external manager will be to pool their investment funds and invest in a diversity of fixed income instruments according to the client’s objective, which may be syariah or non-syariah, depending on their requirements,” he explained.
The added benefit was that diversification could feature a well diversified portfolio of quality money market and fixed income instruments to ensure peace of mind and effective risk management
Since it launch in November 2008, AIIMAN had been working closely with its sister company, HwangDBS Investment Management Bhd (HwangDBS IM) in terms of marketing and product development.
“Both HwangDBS IM and AIIMAN has been working closely with our clients to ensure they achieve their objectives in improving their cash management functions which expectedly, would give direct impact opon their bottomline results.
“Many have been with us since we rolled out our offerings, resulting in us having built up the cash management solutions (CMS) suite to almost RM5.2 billion. We hope to continue building on our track record and expanding our solutions and capabilities to cater to the growing market locally,” highlighted Akmal.
Both AIIMAN and HwangDBS IM are linked via DBS Asset Management (DBSAM) – one of the largest and most experienced asset management firms in Singapore and the greater Southeast Asia under holding parent group, DBS Bank.
Combined with its associated companies including AIIMAN and HwangDBS IM, DBSAM has, as of June this year, managed an estimated S$28.63 billion (RM70.8 billion) worth of assets for retail, private and institutional investors.