KUALA LUMPUR: The shares in AMMB Holdings Bhd (AmBank) fell as much as 6.5% or 37 sen to RM5.33 yesterday, on broader market losses and after news reports alleged that 1Malaysia Development Bhd (1MDB) had channelled some US$700 million (RM2.67 billion) into Prime Minister Datuk Seri Najib Razak’s bank accounts.

At the closing bell, AmBank regained some losses to settle at RM5.35, still down by 6.1%, after about 8.1 million shares changed hands, making it the fifth largest losing counter across the bourse. The current price gives it a market capitalisation of RM16.25 billion.

Analysts cited the 1MDB political saga, which eroded investor confidence, as the trigger for its share price fall.

“It is because of the Najib issue and all the investigations due to the political fiasco. A lot of people don’t have much confidence and they are taking this opportunity to protect their wealth,” said one remisier who declined to be named.

Another analyst said even though AmBank (fundamental: 1.7; valuation: 3) was one of the worst off counters yesterday, most of the bourse’s blue-chips were also down.

“The figures show that AmBank is among the biggest losers today (yesterday). One of the reasons triggering this is the alleged involvement with 1MDB. Another reason could be because China’s A50 Index is down, which has also affected local sentiments.

“All of this has impacted AmBank and the overall negative sentiment might continue to haunt them as long as the 1MDB saga continues. It doesn’t help that the weakening ringgit is exacerbating all this,” said the analyst.

“The sooner the truth is out, the better. Otherwise the market will remain draggy,” he added.

Last week, the Wall Street Journal reported that funds from 1MDB were allegedly channelled into Najib’s personal AmBank account.

Najib has since denied “utilising the money for personal gains” but did not say whether or not the money trail ended up in his account.

On July 7, a special task force comprising Bank Negara Malaysia, the Malaysian Anti-Corruption Commission, Royal Malaysian Police and the Attorney-General’s Chambers, froze six bank accounts in its probe on 1MDB and Najib. Yesterday the police raided 1MDB’s office while the Attorney-General Tan Sri Abdul Gani Patail said none of the six frozen bank accounts belong to Najib.

The Edge Research’s fundamental score reflects a company’s profitability and balance sheet strength, calculated based on historical numbers. The valuation score determines if a stock is attractively valued or not, also based on historical numbers. A score of 3 suggests strong fundamentals and attractive valuations. Go to www.theedgemarkets.com for more details on a company’s financial dashboard.

This article first appeared in The Edge Financial Daily, on July 9, 2015.