Kenanga buying 19% stake in cryptocurrency exchange operator Tokenize

Kenanga buying 19% stake in cryptocurrency exchange operator Tokenize
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KUALA LUMPUR (Feb 8): Kenanga Investment Bank Bhd via its wholly-owned Kenanga Private Equity Sdn Bhd is acquiring a 19% stake in digital asset exchange (DAX) operator Tokenize Technology (M) Sdn Bhd (Tokenize Malaysia) to accelerate the buyers' digital agenda. Tokenize Malaysia operates Tokenize Xchange which allows trading of cryptocurrencies like Bitcoin and Ethereum.

In a statement today, Kenanga Investment said Kenanga Private Equity has entered into a conditional agreement to acquire the 19% equity interest in Tokenize Malaysia.

The statement did not specify how much Kenanga Private Equity is paying for the 19% stake in Tokenize Malaysia and from whom the stake is being acquired.

"Operating under the brand Tokenize Xchange, it (Tokenize Malaysia) is one of the three licensed DAX by the Securities Commission Malaysia (SC), and is currently the second largest DAX in the country by traded market share. Tokenize Xchange is an online exchange that allows trading of cryptocurrencies such as Bitcoin and Ethereum, and operates 24X7, whole year round. 

"Tokenize Xchange was initially launched in Singapore by tech savvy founder Hong Qi Yu in 2018 and it has since captured a customer base of over 100,000. Hong later on set up Tokenize Malaysia to focus on the Malaysia market. In June 2019, Tokenize Malaysia was awarded a Recognized Market Operator licence to operate by SC and its platform, Tokenize Xchange, which went live on April 1, 2020.

"Currently, the market capitalisation of the global crypto market stands at US$1.007 trillion (about RM4.088 trillion), a spike of threefold from four months ago. Relative to the global equity market capitalisation which is estimated to be nearly in the hundred trillion worth, there is still ample upside to the crypto market. This investment in Tokenize Malaysia adds to the line-up of digital initiatives Kenanga Investment has embarked on over recent years. These include the successful joint venture, with Japan-based Rakuten Inc, to introduce the first fully online stock trading platform in Malaysia, Rakuten Trade, which has since seen remarkable record volume growth," Kenanga Investment said.

Kenanga Investment group managing director Datuk Chay Wai Leong said in the statement the group has been building a digital ecosystem to offer its customers a wide spectrum of financial products and services, including digital assets. 

Chay said the emergence of digital assets including cryptocurrencies has been gaining acceptance globally in the last few years. 

"While we are keen on cryptocurrencies as an asset class, we are aware of the volatility and the proliferation of unregulated players in the market. We are therefore very pleased to be given the opportunity to invest in one of the three licensed digital asset exchanges in Malaysia," he said.

Meanwhile, Tokenize Malaysia chief executive officer Hong claimed in the statement that the company's interest in digital assets goes beyond Bitcoin and other commonly traded cryptocurrencies. 

He did not elaborate.

"We believe that the technology behind digital assets is very powerful and the emergence of digital assets in the future is inevitable. We are hopeful that fundraising through the tokenisation of businesses and assets will be a significant part of the capital markets in the future for Malaysia. We believe that through Tokenize Malaysia we can be a key player in the digital capital market space in Malaysia," said Hong, who refers to Kenanga Investment as a key investor. 

"The combined reach, expertise and resources is game-changing and will allow us to scale our presence in Malaysia. Together we will shape the digital asset landscape and build an exciting path forward for investors in the country," he said.

At Bursa Malaysia's 12.30pm break today, Kenanga Investment's share price rose nine sen or 5.52% to RM1.72 for a market capitalisation of about RM1.23 billion.

Kenanga Investment's latest reported number of issued shares stood at 715.72 million.

Chong Jin Hun