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Web-only Exclusives
November 30, 2000

From Our Correspondent: Hirohito and the War
A conversation with biographer Herbert Bix

From Our Correspondent: A Rough Road Ahead
Bad news for the Philippines - and some others

From Our Correspondent: Making Enemies
Indonesia needs friends. So why is it picking fights?

Asiaweek Time Asia Now Asiaweek story

A Man and His Empire

Media-shy Rashid expands beyond Malaysia

By Assif Shameen / Kuala Lumpur


MALAYSIA'S SECOND-LARGEST STOCK BROKERAGE is known as Rashid Hussain Securities. You can find it in Kuala Lumpur's RHB 1 building, also the headquarters of Rashid Hussain Berhad, one of the country's leading financial services group. In the next few weeks, recently merged DCB Bank and Kwong Yik Bank will be renamed RHB -- for Rashid Hussain Berhad -- Bank.

So who is the man behind the businesses? It's not often you read anything about the entrepreneur, who is married to a daughter of Malaysian billionaire Robert Kuok Hock Nien, recently voted Asia's 13th most powerful person by Asiaweek. Jokes Rashid: "If I start to take a high profile, what with my name already on the bank, the brokerage and the building, people might start to ask: what is his problem?"

Not much, really. The urbane but media-shy Rashid, 50, is on a roll. With the merger, RHB Bank (assets: over $10 billion) becomes Malaysia's largest commercial bank after Malayan Banking (No. 70 in the Asiaweek Financial 500) and Bank Bumiputra Malaysia (No. 135). Listed Rashid Hussain Berhad reported profits of nearly $44 million last year. DCB Sakura Merchant Bankers will go public next month. Says the head of a foreign investment house in Singapore: "If you're in financial services in Malaysia, Rashid is clearly the man to beat." Adds a U.S. investment banker: "There's only a handful of good quality local brokerages in Asia that dominate their markets -- Peregrine in Hong Kong, Kim Eng and G.K. Goh in Singapore, and Rashid Hussain in Malaysia."

And all that in just 13 years. "In the next 13," says Rashid in his clipped London accent, "my aim is to consolidate what we have here in Malaysia and become a meaningful player in ASEAN." Rashid Hussain Securities already has operations in Singapore, Jakarta and Manila. The group owns 20% of Indonesia's Bank Niaga and nearly bought a stake in a troubled Thai finance and securities house early this year. Rashid is confident he can still acquire a bank and a brokerage there: "We think over the next year or two, there might be an opportunity to do something substantial in Thailand." He is also scouting for banking opportunities in the Philippines. The bottom line: "We must diversify our earnings base and we've got to look for regional growth."

He has his detractors. "What is the group without Rashid?" asks the head of one foreign brokerage in Kuala Lumpur. "Nothing. What if Rashid ever fell under the proverbial bus? Where will the company be?" Agrees another competitor: "We all know he is out there making deals, getting business for his brokerage or merchant bank and, I suspect, soon for his commercial bank as well." Rashid counters that a team of professionals runs day-to-day operations while he takes care of strategic planning. But he remains a hands-on manager. He does not leave the office until 8 p.m. Even late at night, he is often on his cellular phone catching up with clients several time zones away.

Rashid may be more protective of his company than most founders. Unlike many Malay entrepreneurs, who got a boost from Malaysia's preferential policies for Malays and other indigenous groups, he achieved success through his own efforts. From a middle-class family, Rashid went to university in Britain and later worked for several merchant banks there, including Rothschild. He joined Bumiputra Merchant Bank in Kuala Lumpur in the 1970s. He decided to apply for a stockbroking license and set up his securities firm in 1983. (He met and married Sue Kuok six years later, when he had already made his pile. Rashid does little business with his father-in-law.)

"All I wanted was to become a quality stockbroker," Rashid recalls. The profession was not a route to riches then. The Kuala Lumpur Stock Exchange's market capitalization was less than $30 billion, just a tenth of what it is today. Rashid Hussain Securities was the first in Malaysia to do in-house research on Malaysian companies in 1985. It focused on institutional business, a segment the firm now dominates. (No. 1 brokerage TA Securities concentrates on retail investors.) Rashid's corporate clients include giants like listed power company Tenaga Nasional, state oil firm Petronas and large European and U.S. brokerages that trade through the securities company.

Business boomed as the economy pulled out of a recession in 1987 and began growing at 8% or better. Rashid expanded to related businesses. "We might get involved in the financing aspects of [telecommunications or power companies] but not ownership or operations," says the entrepreneur. "Why get into business that you don't know or don't understand?" Rashid Hussain Securities became Malaysia's first listed brokerage in 1988. Rashid added banking to his burgeoning interests in 1991 with the acquisition of 20% of DCB Bank, a medium-size corporate institution with strong ties to Japan's Sakura Bank. Late last year, the group took control of DCB and retail-based Kwong Yik Bank. He also ventured overseas.

The fledgling regional operations are making money, "but it's still early days," cautions Soon Teck Onn, an analyst for ING Barings in Kuala Lumpur. For Rashid, going ASEAN is a must. Economies are increasingly integrating and companies expanding beyond their borders could use a single group that can service their financial needs across the region. And as the financial services industry in Malaysia and other countries are opened up to more foreign competitors, local companies will need all the help they can get to survive. Rashid believes his group's regional ties will give it the edge.

In Malaysia, Rashid has forged strong connections. One client is former finance minister Daim Zainuddin, a confidant of Prime Minister Mahathir Mohamad and treasurer of the dominant political party UMNO. "Rashid knows what he is doing," says Daim (No. 32 in The Asiaweek Power 50). In a rare foray outside finance, Rashid's group manages the Putra World Trade Center, the venue of UMNO's annual assembly. The complex was losing money when Mahathir asked Rashid to run it four years ago. Last year, it netted more than $8 million. Rashid also advises government investment arm Khazanah Holdings and chairs Putrajaya Holdings, which is building a new city to house government offices.

The buzz in Kuala Lumpur is that Rashid is destined for a cabinet post, possibly the Finance Ministry. Laughing off the expectations, the entrepreneur says he does not have the stomach for politics. His involvement with Khazanah and Putrajaya, Rashid maintains, is in the nature of national service, not political maneuvering. His priority is still business. One area that Rashid has talked about is health insurance. "That could be a big money spinner," says analyst Soon, given Malaysia's growing prosperity and the absence of a national health insurance program. The group also has an 80% share in four office towers going up in Kuala Lumpur, but Rashid is not likely to get deeper into property.

And don't forget regionalization. "We want to be an ASEAN financial-services group," Rashid reiterates. The current bloodbath in Thailand's financial services sector and the fallout on countries seen as similarly vulnerable, such as the Philippines, represent a golden opportunity for him to pick up bargains. His name may soon go up on buildings and companies in more Asian capitals. But don't expect to read more media stories about the man. As Rashid's empire expands, the dapper entrepreneur is bound to work longer in his office -- and take more frequent calls on his cellular phone outside.


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