KUALA LUMPUR, Nov 5 (Bernama) -- Bursa Malaysia closed higher, buoyed by Bank Negara Malaysia’s (BNM) decision to maintain the Overnight Policy Rate (OPR) at 2.75 per cent, alongside positive cues from Wall Street. At 5 pm, the FTSE Bursa Malaysia KLCI (FBM KLCI) rose 19.30 points, or 1.19 per cent, to 1,635.86 from Wednesday’s close of 1,616.56. The benchmark index opened 6.72 points higher at 1,623.28, and fluctuated between an intraday high of 1,642.44 and a low of 1,622.62 during the trading session. However, market breadth was negative, with losers outnumbering gainers 723 to 497, while 466 counters were unchanged, 1,075 untraded and 10 suspended. Turnover rose to 3.74 billion units valued at RM3.61 billion compared with yesterday’s 2.81 billion units valued at RM2.57 billion.
Blackstone Inc. is intensifying its focus on expanding its international credit business, targeting significant growth in debt investments, including local-currency investments. This strategic move comes as the private credit market continues to expand rapidly, drawing both interest and scrutiny from regulators.
Key Highlights
Expansion Strategy:
- Global Focus: Gilles Dellaert, global head of credit and insurance at Blackstone, emphasized the firm's commitment to scaling its operations in Europe and Asia.
- Private Investment-Grade Credit: Blackstone is expanding into the private investment-grade credit sector, which represents a market opportunity of $25 trillion to $50 trillion. This includes asset-backed financing beyond corporate loans.
Market Dynamics:
- Private Credit Market: The global private credit market, valued at $1.7 trillion, is attracting investors due to higher yields and better spreads compared to public markets.
- Investor Interest: Investors are increasingly pouring cash into private credit markets, seeking additional returns over traditional public debt markets.
Financial Performance:
- Q2 Results: Blackstone's credit and insurance business, with about $330 billion in assets under management as of June's end, delivered the firm's largest gains in the second quarter. Fees in this segment increased by 29%, and profits available to shareholders surged by 51%.
Strategic Appointments:
- Blackstone hired Dan Leiter, former global head of securitized products trading at Morgan Stanley, to lead its international credit and insurance business.
Direct Lending and Regional Focus:
- Global Direct Lending: Blackstone's global direct lending business totals about $120 billion.
- Asia Expansion: The firm is targeting Asia as a $5 billion lending platform in the near term, having deployed about $1 billion annually in the region since 2022.
Competitive Landscape:
- Competitors like Apollo Global Management Inc. and Carlyle Group Inc. are also expanding into investment-grade debt, traditionally dominated by highly levered companies.
Regulatory Scrutiny:
- Regulatory Concerns: The rapid growth of private credit is attracting scrutiny from regulators due to concerns about potential systemic risks.
- IMF and EU: The International Monetary Fund has called for a more intrusive supervisory and regulatory approach to private credit. The European Union has agreed on new transparency requirements for private credit investment funds.
Local-Currency Investments:
- Client Demand: Blackstone plans to increase local-currency deals, responding to client preferences for multi-currency portfolios. The firm is already active in Australia and Singapore and is looking for yen-denominated deals to meet the needs of Japanese clients.
Conclusion
Blackstone's strategic push into the international private credit market reflects its ambition to capitalize on the sector's growth opportunities while navigating increasing regulatory scrutiny. By expanding its operations in Europe and Asia and focusing on private investment-grade credit, Blackstone aims to establish itself as a global leader in the private credit market, providing tailored solutions to meet the diverse needs of its international clients.
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