EPF AMONG BUYERS OF CIMB SHARES SOLD BY MITSUBISHI UFJ
Pension fund acquires 50 million shares for 5 per cent discount
THE Employees Provident Fund (EPF) has emerged as one of the funds that bought Mitsubishi UFJ Financial Group’s (MUFG) 412 million CIMB Group Holdings Bhd shares on Tuesday for reportedly RM2.56 billion.
EPF deputy chief executive officer of investment Mohamad Nasir Ab Latif told NST Business that it had bought about 50 million shares, or less than one per cent of CIMB.
He did not disclose the price but said the shares were bought at a discount of about five per cent.
Bloomberg had reported that MUFG priced its sale at RM6.20, below the midpoint of a marketed range.
“The shares were displaced from the market. Many people bought MUFJ shares. They were not limited to one single buyer,” said Nasir, adding that the sale had attracted a lot of interest.
Today, CIMB shares rebounded after six consecutive days of losses.
Prior to the stake sale announcement by MUFG, CIMB’s shares closed at RM6.46.
When the announcement was made on Wednesday the shares slipped to RM6.31.
Yesterday, the shares recovered 0.63 per cent, or four sen, higher to close at RM6.35.
Inter-Pacific Research head of research Pong Teng Siew said CIMB’s shares were initially dragged down by the MUFG stake disposal.
Pong is optimistic of the bank’s share performance, leveraging its earnings from improved loan growth.
“I think that would keep CIMB’s earnings on a gradual upward trend. It’s not going to fall. In due course, this temporary event which has affected CIMB’s shares price would subside,” he said.
Pong added that CIMB shares have the potential to climb higher, as the loan growth in Malaysia was picking up pace.
“This year’s loan growth has improved quite consistently over last year’s. In Indonesia, CIMB’s operating unit has started to contribute in a big way,” he said.
On why MUFG had disposed of its entire 4.56 per cent stake in CIMB, Pong said it was part of a global trend, particularly from banks in developed countries, which are gradually moving back to their home bases.
“You can see it is happening slowly, in bits and pieces. Banking is no more what it used to be. It was a high growth and leverage business.
“Currently, regulators globally are pushing banks to raise more capital and restricting what they can do — the banks have to conserve their capital by selling off non-core assets,” he said.
“Above all, it is a move to conserve their capital resources by selling off non-core business,” he added.