Malacca Trust Limited posted a strong trading debut on the Catalist board of SGX on Tuesday. The group was the most actively traded counter with some 76.0 million shares changing hands.

The stock closed at S$0.315 per share, a 43.2 per cent gain from its issue price of S$0.22 per share. This values the group at around S$109.3 million.

Malacca Trust on July 18 launched an Initial Public Offer (IPO) of 85,000,000 new shares, comprising 2,000,000 offer shares at S$0.22 each by way of public offer and 83,000,000 placement shares at S$0.22 each by way of placement.

At the close of the invitation on July 22, the group’s IPO was approximately 1.32 times subscribed.

The group said the net proceeds from its Singapore listing of around S$16.7 million will be used for the loan repayment and general working capital requirements.

Biz Daily caught up with Malacca Trust’s CEO, Mr Rudy Johansen, to explain with us further his group’s offering to SGX investors.

Can you tell us more about Malacca Trust?

We are an Indonesia-based group that provides a wide range of financial services to a diverse customer base including both retail and institutional customers in the Indonesian market. The group’s business comprises three main segments including consumer financing of primarily pre-owned passenger cars and commercial vehicles; asset management services; and equity and fixed income brokerage, margin financing and corporate finance advisory services.

Your group, specifically your consumer financing subsidiary, has been listed in Indonesia since 2009. Why then did you decide to dual list in SGX?

We feel that now, listed shares have become currency. So in the future if we want to grow through acquisitions or mergers, we can use our shares to pay (e.g share swap). And here in Singapore, we feel that share currency is very strong and stronger than in Indonesia.

What kind of investment play do you offer to investors here?

Our business is a diversified financial services firm in Indonesia. It has a very good growth history and coupled with the fact that we have been operating in high-growth market such as Indonesia, I think investors can expect long-term growth and therefore an increasing share price. We’ve been constantly building the fundamentals of our business and that should translate to delivering good values to our shareholders.

So you intend to stay in Indonesia?

Currently we don’t have plans to do cross border business because we feel that we have not covered enough in Indonesia. There is still a wide room for growth for us.

Talking about room for growth, what’s your take on industry prospects and what is the overall market opportunity for Malacca Trust?

The Central Bank of Indonesia has forecasted Indonesian economic growth for 2011 to increase to as much as 6.5 per cent and the gross domestic product growth to increase by between 6.0-6.5 per cent in 2011, driven mainly by domestic demand and increase in investment activity.

Credit growth in 2011 is expected to be 20.0-24.0 per cent. In addition, the forecasted annual sale of automobiles is expected to increase by an average of 16.4 per cent from 2010 to 2014.

Our unit, BPF, is engaged in consumer financing, and currently provides financing solutions to customers for pre-owned automobile purchases. Based on the expected credit growth in 2011, we believe that the demand for consumer financing will continue to increase, thus offering BPF greater opportunities for expansion.

If you look at net asset value of mutual funds in Indonesia, in the last three years, it registered growth of 42 per cent while the daily equity trading value has more than doubled in the last two years.

These are good indicators for our asset management and securities businesses as well.

I understand that Malacca Trust is in the process of entering the insurance business as well in Indonesia. Why insurance?

Owning an insurance company will give us a lot of synergy without diverging away from our focus as a diversified financial services group. On top of that, our finance company has been dealing with general insurance companies….we have been paying like Rp12-14 billion in insurance premiums every year, so we feel that having our own general insurance firm will translate to a captured market for us.

Our upcoming insurance business will leverage on our 25 retail branches in Indonesia that will reach to our more than 10,000 retail customers at present.

But on the management level, do you have a ready experienced people to handle insurance business?

We don’t have the numbers yet. We are currently in the process of forming the team.

Aside from insurance, any other business segment you’re looking at?

We are constantly looking for opportunities. As and when it arises, we will assess whether it suits us. But for now, our focus is to add in the insurance arm in our group.

So tell us more about your business strategies and future plans?

The group will expand and broaden its coverage within Indonesia by setting up new branches and/or point-of-sale offices. In addition to organic growth, we will explore opportunities to grow through strategic alliances, joint ventures, mergers and acquisitions.

We will diversify our funding sources by increasing direct participation in capital markets and improve financial performance through a conservative capital structure, asset to liability ratio and interest rate exposure.

We noticed that 95 per cent of IPO proceeds will go towards bank repayments. How then do you intend to finance your expansion plans?

Unlike manufacturing companies, we don’t have large capital expenditure (capex) requirements. As for our expansion, like opening new branches, it is very cheap because we don’t own properties, we just rent properties. And we only need like six or seven people to run that branch.

All in all, we have no problem in terms of cashflow for our expansion plans at present. We have enough internally generated funds for these.