Friday 29 Mar 2024
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KUALA LUMPUR (Jan 13): CIMB Group Holdings Bhd told Bursa Malaysia this evening that its board will discuss the mega bank merger on Wednesday, Jan 14, while RHB Capital Bhd (RHBCap) said it is unable to provide further details pertaining to the current status of the said merger, in response to queries from the exchange on a report by The Edge Financial Daily today that the merger deal is off.

Meanwhile, Malaysia Building Society Bhd (MBSB), which is also a party in the proposed merger, told Bursa that it will be having a regular board meeting tomorrow, which has been scheduled last week. 

“Amongst the items for deliberation are matters relating to the proposed merger. Should there be any material development on the proposed merger, the appropriate announcement will be made on Bursa Securities accordingly,” it added.

The Edge Financial Daily, quoting sources, reported today that an official announcement on the mega merger being called off is expected before the end of the week.

CIMB (fundamental score: 1.35; valuation score: 2.1) was the top gainer on Bursa today after news that its proposed mega merger with RHBCap and MBSB is off. The counter rose by 74 sen or 14.29% to close at RM5.92— off an intraday high of RM5.94— giving it a market capitalisation of RM49.78 billion.

Likewise, RHBCap (fundamental: 1.5; valuation: 2.1) rose 7 sen, or 0.91% to RM7.80 with a market capitalisation of RM20.09 billion.

However, the upward trend was not felt by MBSB (fundamental: 1.2; valuation: 1.6) as its shares fell 13 sen, or 5.94% to RM2.06, giving it a market capitalisation of RM5.66 billion.

A dealer with a local investment bank said the positive share price movements on CIMB and RHBCap today reflect investors’ preference that the merger be called off.

“When CIMB and RHB announced the mega merger, there was a lot of uncertainty among investors, and now that there is news that the deal may be called off, there could be some relief among investors as they are no longer having doubts on the sustainability of the deal, however the news may not sit well with MBSB investors who were expecting to cash in on the deal,” he told theedgemarkets.com.

(Note: The Edge Research's Fundamental Score reflects a company’s profitability and balance sheet strength, calculated based on historical numbers. A score of 0 means weak fundamentals and a score of 3 means strong fundamentals. Meanwhile, the Valuation Score determines if a stock is attractively valued or not, calculated based on historical numbers. A score of 0 means valuations are not attractive. Vice versa, a score of 3 means valuations are attractive.)

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