14 WE ARE KENANGA LEADERSHIP MESSAGE VALUE CREATION MODEL KENANGA INVESTMENT BANK BERHAD ANNUAL REPORT 2023 GROUP MANAGING DIRECTOR’S MANAGEMENT DISCUSSION AND ANALYSIS DEAR SHAREHOLDERS, The year 2023 proved to be another challenging period for the world economy as headwinds from the previous year lingered, accompanied by escalating geopolitical tensions, persistently high inflation, sluggish growth, and turbulent financial markets. In response to inflationary pressures, the US Federal Reserve raised interest rates four (4) times, and many major central banks worldwide followed suit with Bank Negara Malaysia opting for a single rate hike in May 2023. These high interest rate moves had a cooling effect on global economic growth, dampening both business and consumer sentiment. Aggravating these challenges include China’s slow economic recovery, the ongoing Russia and Ukraine war, and the Israel-Palestine conflict, which added further layers of uncertainty to the economic landscape. According to the International Monetary Fund (“IMF”), the global Gross Domestic Product (“GDP”) projection stands at 3.2% for 2023, up from 2.3% in 2022. Meanwhile, Malaysia’s GDP growth moderated to 3.7% in 2023 from 8.7% in 2022, while inflation averaged 2.5%, down from 3.3% in 2022. The cumulative impact of these global events reverberated through capital markets worldwide, including Malaysia. Despite the challenges, Malaysia’s economy demonstrated resilience, driven by robust domestic demand. This resilience underscored Malaysia’s capital market as a steadfast platform for fundraising endeavours. Within the ASEAN region, FTSE Bursa Malaysia KLCI (FBMKLCI) emerged as the second-best performer, underlining a modest 5.7% upswing in the second (2nd) half of 2023, reaching 1,454.7 points — a healthy rebound from the 1,376.7 points recorded in the first (1st) half. OVERVIEW Amid formidable challenges, I am pleased to share that Kenanga and Its Group of Companies (“Kenanga Group” or “the Group”) delivered another strong year, with a Revenue of RM821.1 million and a Profit Before Tax (“PBT”) of RM88.1 million for the Financial Year Ended 31 December 2023 (“FY2023”). Net Profit for the year stood at RM72.8 million. As we celebrate fifty (50) years of growth as a proud and thriving homegrown brand, the positive outcomes achieved reflect the grit, persistence, and innovation that have consistently been the hallmark of our journey. These accomplishments stand as a testament to our commitment to safeguarding our clients’ financial interests, showcasing strength derived from agility and a diversified range of businesses. Throughout the year, our focus was centred on fortifying the pillars of our success. In our pursuit of sustained growth and shareholder value creation, we adhered to thoughtful and prudent practices. Strategic planning was exemplified through the development of innovative products tailored to meet client needs, branch consolidation efforts for enhanced efficiency, as well as substantial investments in cybersecurity and technology to ensure the financial well-being in the digital age. As we navigate the ever-evolving landscape of the financial industry, we believe these strategic initiatives will position us for growth and resilience.
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