Published: 2010/06/08
Foreign reserves in Malaysia, Singapore and Hong Kong fell in May as investors sold assets amid concern Europe’s debt crisis will slow the rebound in the global economy.
Malaysia’s reserves fell to RM312.21 billion, equivalent to US$95.5 billion, as of May 31, from RM313.92 billion at the end of April, Bank Negara Malaysia said yesterday. Singapore’s official reserves slid 2.5 per cent to US$198.4 billion and Hong Kong’s declined 1.2 per cent to US$256.2 billion.
“Europe certainly has had an impact and there has been plenty of evidence of flows leaving Asia’s equity markets, and as risk aversion increased, outflows have accelerated,” said Mitul Kotecha, head of global currency strategy in Hong Kong at Credit Agricole CIB.
Asian governments said last month public debt risks and “destabilizing” capital flows are among threats to the region’s recovery. The escalation of Europe’s debt crisis forced the European Union and the International Monetary Fund to offer as much as 750 billion euros (US$898 billion) to countries in danger of financial instability and spurred a decline in global stocks last month.
“Foreign investors continued to liquidate their portfolio holdings on heightened risk aversion arising from worries that the European debt problems could halt the global recovery,” Lee Heng Guie, chief economist at CIMB Investment Bank in Kuala Lumpur, said in a note today on the Malaysian reserves.
In Malaysia, capital outflows from the equity market outpaced increased flows into the debt market in May, Lee said.
Malaysia’s FTSE Bursa Malaysia KLCI Index of stocks dropped 4.6 per cent in May, while the MSCI Asia Pacific Index fell 9.8 per cent in the same period. Both indices had their biggest declines since October 2008. -- Bloomberg
http://www.btimes.com.my/Current_News/BTIMES/articles/20100608140342/Article/index_html
Monday, June 7, 2010
May reserves at RM312bil
Tuesday June 8, 2010
KUALA LUMPUR: Bank Negara Malaysia’s international reserves amounted to RM312.2bil (equivalent to US$95.5bil) as at May 31, 2010.
The reserves position is sufficient to finance 8.3 months of retained imports and is 4.4 times the short-term external debt, said the central bank in a statement yesterday. — Bernama
http://biz.thestar.com.my/news/story.asp?file=/2010/6/8/business/6421117&sec=business
KUALA LUMPUR: Bank Negara Malaysia’s international reserves amounted to RM312.2bil (equivalent to US$95.5bil) as at May 31, 2010.
The reserves position is sufficient to finance 8.3 months of retained imports and is 4.4 times the short-term external debt, said the central bank in a statement yesterday. — Bernama
http://biz.thestar.com.my/news/story.asp?file=/2010/6/8/business/6421117&sec=business
Eurozone nations set up US$1 trillion bailout fund
Published: Tuesday June 8, 2010 MYT 9:18:00 AM
LUXEMBOURG: Eurozone nations have begun setting up a massive bailout fund that could rescue any member of Europe's currency union from default, aiming to soothe market jitters that have sent the euro to a new four-month low against the dollar.
The "shock and awe" financial rescue package from the European Union and the International Monetary Fund will total euro750 billion (US$1 trillion) - money that can be lent to any indebted eurozone nation risking default, and intended to counter investor fears that Spain, Portugal or others could follow Greece in requiring a bailout to meet debt repayments.
The special purpose vehicle to borrow up to euro440 billion ($526 billion) will be ready this month, when countries formalize debt guarantees for some 90 percent of the package, said Luxembourg Prime Minister Jean-Claude Juncker, who led Monday's talks between eurozone finance ministers.
Another euro60 billion managed by the EU's executive commission "is available to cover urgent financial needs were it to arise" in the meantime, he said, while the International Monetary Fund will provide another euro250 billion.
Germany, which will provide the largest chunk of the EU fund, has pressed other eurozone countries to make big budget cuts to reduce the chances of them needing a bailout.
Markets "want to see not only actions but deeds" to shore up the currency, German Finance Minister Wolfgang Schaeuble told reporters.
German Chancellor Angela Merkel vowed to "set an example" Monday by laying out plans to save euro80 billion through 2014 by reducing handouts to parents, cutting 15,000 government jobs and delaying projects such as construction of a replica of a Prussian palace in Berlin.
Juncker said eurozone finance ministers wanted Spain and Portugal to build on current "significant and courageous" spending cuts with further efforts "needed beyond 2011 together with further progress" on structural reforms, such as changes to pensions, welfare or labor systems.
EU Economy Commissioner Olli Rehn warned that they and others may need to prepare more budget reductions.
He did not name which other countries should take action.
Eurozone nations said in a joint statement that they would draft bigger cuts and tax increases if they have to and would pursue "structural reforms" to slim state running costs - such as raising retirement ages to curb pension costs.
The International Monetary Fund called in a Monday report for eurozone countries facing market pressure to shun "delayed or half-hearted" budget cuts and draft more in case they can't make current targets to reduce budget deficits - the gap between government spending and income.
Juncker dismissed market volatility in recent days triggered by concern that Hungary - which does not use the euro - could be the next European government to follow Greece by risking a default.
Hungarian officials last week warned that the country's deficit is growing and the country is close to default, two years after it received a bailout from the EU and the IMF..
Hungary's government has downplayed those comments, which nevertheless kept the euro trading near the four-year lows it hit Friday, when it went below $1.19 for the first time since March 2006.
There is intense pressure on all eurozone countries to make cuts.
However, trade unions warn that budget cuts could be going too far and could choke a fragile recovery that so far relies more on exports than domestic demand in European countries where people are still slow to spend and companies are reluctant to hire new workers.
Unemployment in the eurozone reached a 10-year high of 10.1 percent in April - adding extra welfare costs to governments struggling with higher outgoings, lower tax revenue and debt that has soared since they paid out hundreds of billions to shore up the region's banking system.
Monday's talks between eurozone finance ministers will be followed by a meeting of most EU finance ministers and EU officials who will thrash out plans for long-term ways to avoid a new economic crisis, including a proposal for more EU oversight of national budgets. - AP
http://biz.thestar.com.my/news/story.asp?file=/2010/6/8/business/20100608092110&sec=business
LUXEMBOURG: Eurozone nations have begun setting up a massive bailout fund that could rescue any member of Europe's currency union from default, aiming to soothe market jitters that have sent the euro to a new four-month low against the dollar.
The "shock and awe" financial rescue package from the European Union and the International Monetary Fund will total euro750 billion (US$1 trillion) - money that can be lent to any indebted eurozone nation risking default, and intended to counter investor fears that Spain, Portugal or others could follow Greece in requiring a bailout to meet debt repayments.
The special purpose vehicle to borrow up to euro440 billion ($526 billion) will be ready this month, when countries formalize debt guarantees for some 90 percent of the package, said Luxembourg Prime Minister Jean-Claude Juncker, who led Monday's talks between eurozone finance ministers.
Another euro60 billion managed by the EU's executive commission "is available to cover urgent financial needs were it to arise" in the meantime, he said, while the International Monetary Fund will provide another euro250 billion.
Germany, which will provide the largest chunk of the EU fund, has pressed other eurozone countries to make big budget cuts to reduce the chances of them needing a bailout.
Markets "want to see not only actions but deeds" to shore up the currency, German Finance Minister Wolfgang Schaeuble told reporters.
German Chancellor Angela Merkel vowed to "set an example" Monday by laying out plans to save euro80 billion through 2014 by reducing handouts to parents, cutting 15,000 government jobs and delaying projects such as construction of a replica of a Prussian palace in Berlin.
Juncker said eurozone finance ministers wanted Spain and Portugal to build on current "significant and courageous" spending cuts with further efforts "needed beyond 2011 together with further progress" on structural reforms, such as changes to pensions, welfare or labor systems.
EU Economy Commissioner Olli Rehn warned that they and others may need to prepare more budget reductions.
He did not name which other countries should take action.
Eurozone nations said in a joint statement that they would draft bigger cuts and tax increases if they have to and would pursue "structural reforms" to slim state running costs - such as raising retirement ages to curb pension costs.
The International Monetary Fund called in a Monday report for eurozone countries facing market pressure to shun "delayed or half-hearted" budget cuts and draft more in case they can't make current targets to reduce budget deficits - the gap between government spending and income.
Juncker dismissed market volatility in recent days triggered by concern that Hungary - which does not use the euro - could be the next European government to follow Greece by risking a default.
Hungarian officials last week warned that the country's deficit is growing and the country is close to default, two years after it received a bailout from the EU and the IMF..
Hungary's government has downplayed those comments, which nevertheless kept the euro trading near the four-year lows it hit Friday, when it went below $1.19 for the first time since March 2006.
There is intense pressure on all eurozone countries to make cuts.
However, trade unions warn that budget cuts could be going too far and could choke a fragile recovery that so far relies more on exports than domestic demand in European countries where people are still slow to spend and companies are reluctant to hire new workers.
Unemployment in the eurozone reached a 10-year high of 10.1 percent in April - adding extra welfare costs to governments struggling with higher outgoings, lower tax revenue and debt that has soared since they paid out hundreds of billions to shore up the region's banking system.
Monday's talks between eurozone finance ministers will be followed by a meeting of most EU finance ministers and EU officials who will thrash out plans for long-term ways to avoid a new economic crisis, including a proposal for more EU oversight of national budgets. - AP
http://biz.thestar.com.my/news/story.asp?file=/2010/6/8/business/20100608092110&sec=business
Menguruskan Negara Tak Sama Dengan Menguruskan Syarikat
Terdapat desakan agar kerajaan segera menarik atau mengurangkan subsidi. Ini deperkuatkan dengan alasan bahawa negara akan muflis kiranya pemberian subsidi diteruskan di negara ini. Gesaan ini mendatangkan kritik keras daripada pelbagai pihak, antaranya pihak-pihak yang pernah turut sama menerajui badan-badan penting seperti Datuk Salleh Majid di Mingguan Malaysia pada dua minggu yang lepas serta ulasan timbalan menteri kewangan dan lain-lain.
Isu ini timbul daripada kenyataan menteri tertentu yang memantau prestasi indek kebangsaan. Ianya disokong dengan hujah daripada pakar-pakar ekonomi yang menerajui institusi tertentu di Malaysia. Tetapi mereka lupakah prinsip analisa "Political", "Economy", "Social" dan "Technology" dalam merangka kenyataan mereka? Apakah mereka lupa bahawa kerajaan Barisan Nasional(BN) sekarang sedang berhempas pulas menarik sokongan rakyat sedangkankenyataan mereka sedikit sebanyak meranapkan keyakinan rakyat terhadap BN.Contoh terbaik ialah dasar-dasar yang dibuat oleh kerajaan BN telah ditolak oleh rakyat pada pilihanraya yang lepas. Ungkapan yang menyakitkan hati semasa itu dipihak kerajaan ialah"Subsidi membebankan kerajaan". Natijahnya ialah rata-rata rakyat mula bersuara, kalau tak nak dibebankan, jangan jadi kerajaan dan berikan sahaja kepada pihak lain.
Jika pengaliran wang keluar dapat dikawal, pemberian subsidi tak akan menjadi beban sekiranya wang masih berlegar dilingkungan ekonomi yang sama.Kiranya subsidi diberi, ianya membantu mencapai sasaran menjadikan rakyat berpendapatan tinggi seperti yang disasarkan dalam Model Ekonomi Baru, dan kerajaan boleh mengutip cukai. Kiranya subsidi dipotong, maka ianya akan menzahirkan kerajaan berpendapatan tinggi tetapi rakyat berpendapatan rendah. Ini adalah dua pilihan yang ada pada pentadbiran Dato' Seri Najib sekarang.Apakah kerajaan akan memilih pilihan kedua? Jika itu yang dipilih, apalah gunanya kalau ianya menguntungkan pembangkang.
Pihak yang mencadang agar subsidi dikurangkan telah mengadakan bancian secara online dan mereka telah mendakwa majoriti daripada responden yang terlibat menyokong agar subsidi ditarik balik. Bagi saya adalah amat dangkal jika kita merujuk kepada survey di internet yang telah menyediakan jawatan secara diskriptif semata-mata dan para rseponden tidak mempunyai pilihan terhadap option jawapan yang disediakan.
Apakah kita lupa bahawa di pihak pembangkang, yang mana ada pihak yang diupah berjuta-juta Ringgit bagi menjalankan propaganda politik mereka? Memang benar kata Tun Dr Mahathir bahawa Melayu mudah lupa.
Isu ini timbul daripada kenyataan menteri tertentu yang memantau prestasi indek kebangsaan. Ianya disokong dengan hujah daripada pakar-pakar ekonomi yang menerajui institusi tertentu di Malaysia. Tetapi mereka lupakah prinsip analisa "Political", "Economy", "Social" dan "Technology" dalam merangka kenyataan mereka? Apakah mereka lupa bahawa kerajaan Barisan Nasional(BN) sekarang sedang berhempas pulas menarik sokongan rakyat sedangkankenyataan mereka sedikit sebanyak meranapkan keyakinan rakyat terhadap BN.Contoh terbaik ialah dasar-dasar yang dibuat oleh kerajaan BN telah ditolak oleh rakyat pada pilihanraya yang lepas. Ungkapan yang menyakitkan hati semasa itu dipihak kerajaan ialah"Subsidi membebankan kerajaan". Natijahnya ialah rata-rata rakyat mula bersuara, kalau tak nak dibebankan, jangan jadi kerajaan dan berikan sahaja kepada pihak lain.
Jika pengaliran wang keluar dapat dikawal, pemberian subsidi tak akan menjadi beban sekiranya wang masih berlegar dilingkungan ekonomi yang sama.Kiranya subsidi diberi, ianya membantu mencapai sasaran menjadikan rakyat berpendapatan tinggi seperti yang disasarkan dalam Model Ekonomi Baru, dan kerajaan boleh mengutip cukai. Kiranya subsidi dipotong, maka ianya akan menzahirkan kerajaan berpendapatan tinggi tetapi rakyat berpendapatan rendah. Ini adalah dua pilihan yang ada pada pentadbiran Dato' Seri Najib sekarang.Apakah kerajaan akan memilih pilihan kedua? Jika itu yang dipilih, apalah gunanya kalau ianya menguntungkan pembangkang.
Pihak yang mencadang agar subsidi dikurangkan telah mengadakan bancian secara online dan mereka telah mendakwa majoriti daripada responden yang terlibat menyokong agar subsidi ditarik balik. Bagi saya adalah amat dangkal jika kita merujuk kepada survey di internet yang telah menyediakan jawatan secara diskriptif semata-mata dan para rseponden tidak mempunyai pilihan terhadap option jawapan yang disediakan.
Apakah kita lupa bahawa di pihak pembangkang, yang mana ada pihak yang diupah berjuta-juta Ringgit bagi menjalankan propaganda politik mereka? Memang benar kata Tun Dr Mahathir bahawa Melayu mudah lupa.
Thursday, June 3, 2010
M’sia won’t go bankrupt, says Awang Adek
Friday June 4, 2010
KOTA BAHARU: Malaysia will not go bankrupt in 2019 even if a subsidy totalling RM74bil a year is continued, said Deputy Finance Minister, Senator Datuk Dr Awang Adek Hussein.
He said the country’s economy would not be as bad as it had been portrayed such as not being able to repay its debts should the Government continue its subsidy programme.
The move to cut subsidy was aimed at reducing the country’s deficit rate and ensuring a more stable financial standing for the country, he said after delivering a speech at Universiti Sains Malaysia, Kubang Kerian get-together session here yesterday.
Awang Adek was commenting on the statement by Minister in the Prime Minister’s Department, Datuk Seri Idris Jala, that the country could go bankrupt if the provision of subsidy to the rakyat is continued.
According to Jala, who is also the Prime Minister Department’s Performance Management and Delivery Unit chief executive officer, bankruptcy was possible as Malaysia’s debt was expected to rise to 100% of the gross domestic product in 2019 if the provision of subsidy continues. — Bernama
http://biz.thestar.com.my/news/story.asp?file=/2010/6/4/business/6400949&sec=business
KOTA BAHARU: Malaysia will not go bankrupt in 2019 even if a subsidy totalling RM74bil a year is continued, said Deputy Finance Minister, Senator Datuk Dr Awang Adek Hussein.
He said the country’s economy would not be as bad as it had been portrayed such as not being able to repay its debts should the Government continue its subsidy programme.
The move to cut subsidy was aimed at reducing the country’s deficit rate and ensuring a more stable financial standing for the country, he said after delivering a speech at Universiti Sains Malaysia, Kubang Kerian get-together session here yesterday.
Awang Adek was commenting on the statement by Minister in the Prime Minister’s Department, Datuk Seri Idris Jala, that the country could go bankrupt if the provision of subsidy to the rakyat is continued.
According to Jala, who is also the Prime Minister Department’s Performance Management and Delivery Unit chief executive officer, bankruptcy was possible as Malaysia’s debt was expected to rise to 100% of the gross domestic product in 2019 if the provision of subsidy continues. — Bernama
http://biz.thestar.com.my/news/story.asp?file=/2010/6/4/business/6400949&sec=business
Timing crucial in Affin’s bid to buy EON Cap
Thursday June 3, 2010
By YVONNE TAN
yvonne@thestar.com.my
PETALING JAYA: It remains unclear how much longer Bank Negara will take to decide whether to allow Affin Holdings Bhd to go ahead with its plan to acquire EON Capital Bhd (EON Cap).
The timing of the central bank’s decision is crucial in light of the existing RM5.06bil cash offer by Hong Leong Bank Bhd (HLB), which will soon be despatched to EON Cap shareholders.
When contacted, the central bank said it does not comment on specific issues relating to individual financial institutions.
After much speculation, Affin finally said on Monday that it had submitted a proposal to begin talks for the proposed buyout of EON Cap.
Affin, in its note to Bursa Malaysia, said it had submitted the application to the central bank on May 4, almost a month ago.
In contrast, it is understood that Bank Negara took two days to grant HLB the green light to commence negotiations with certain shareholders of EON Cap and about three weeks to start talks with the board of EON Cap.
A party familiar with the workings of the central bank, however, noted that all proposals had different levels of complexities and cannot be assessed using the same methods and time-frame.
The application to Bank Negara for approval is required pursuant to the Banking and Financial Institutions Act 1989.
Analysts noted that while Affin, being the second smallest banking group in the country, might not have sufficient financial muscle to undertake the deal on its own, it had shareholders with deep pockets, such as Lembaga Angkatan Tentera, which holds 32% stake in the bank, and Hong Kong’s Bank of East Asia, which owns 22%.
Both are said to be ready to back a rights issue by Affin to raise funds for the deal, should the acquisition go as planned.
Meanwhile, what is quite certain is HLB’s offer will be tabled to EON Cap shareholders at an EGM, which most expect to take place at the earliest by the end of next month.
At the market close yesterday, shares in Affin were down 1 sen to RM2.91 while HLB lost 4 sen to RM8.36. EON Cap shares finished flat at RM7.
http://biz.thestar.com.my/news/story.asp?file=/2010/6/3/business/6390862&sec=business
By YVONNE TAN
yvonne@thestar.com.my
PETALING JAYA: It remains unclear how much longer Bank Negara will take to decide whether to allow Affin Holdings Bhd to go ahead with its plan to acquire EON Capital Bhd (EON Cap).
The timing of the central bank’s decision is crucial in light of the existing RM5.06bil cash offer by Hong Leong Bank Bhd (HLB), which will soon be despatched to EON Cap shareholders.
When contacted, the central bank said it does not comment on specific issues relating to individual financial institutions.
After much speculation, Affin finally said on Monday that it had submitted a proposal to begin talks for the proposed buyout of EON Cap.
Affin, in its note to Bursa Malaysia, said it had submitted the application to the central bank on May 4, almost a month ago.
In contrast, it is understood that Bank Negara took two days to grant HLB the green light to commence negotiations with certain shareholders of EON Cap and about three weeks to start talks with the board of EON Cap.
A party familiar with the workings of the central bank, however, noted that all proposals had different levels of complexities and cannot be assessed using the same methods and time-frame.
The application to Bank Negara for approval is required pursuant to the Banking and Financial Institutions Act 1989.
Analysts noted that while Affin, being the second smallest banking group in the country, might not have sufficient financial muscle to undertake the deal on its own, it had shareholders with deep pockets, such as Lembaga Angkatan Tentera, which holds 32% stake in the bank, and Hong Kong’s Bank of East Asia, which owns 22%.
Both are said to be ready to back a rights issue by Affin to raise funds for the deal, should the acquisition go as planned.
Meanwhile, what is quite certain is HLB’s offer will be tabled to EON Cap shareholders at an EGM, which most expect to take place at the earliest by the end of next month.
At the market close yesterday, shares in Affin were down 1 sen to RM2.91 while HLB lost 4 sen to RM8.36. EON Cap shares finished flat at RM7.
http://biz.thestar.com.my/news/story.asp?file=/2010/6/3/business/6390862&sec=business
Potential synergies in Affin-EON Cap merger
Friday June 4, 2010
By ELAINE ANG
elaine@thestar.com.my
Combined entity will have strong niche in SME and hire purchase segments
PETALING JAYA: The possible merger between Affin Holdings Bhd and EON Capital Bhd (EON Cap) could create a combined banking group with a strong niche in the small and medium enterprise (SME) and hire purchase banking segments.
“Affin’s strength is in SME loans while EON Cap’s focus is in the consumer hire purchase segment. The merger will enable the combined group to excel in niche areas such as the SME and hire purchase businesses. These areas have much potential for growth,” a source familiar with banking operations said.
The combined banking group will be in third position in terms of SME and hire purchase lending versus other listed peers with loans worth RM12.2bil and RM14.6bil respectively. The possible merger would also enable the group to develop new areas of business in bancassurance, corporate and investment banking, treasury and priority banking, the source said.
The possible merger of Affin, the eighth largest banking group in the country, with the seventh largest EON Cap, would result in the sixth largest bank by assets with combined assets totalling some RM83bil. It would also create a banking group with the fourth largest branch network in the country with 230 branches nationwide.
Analysts said Affin’s subsidiaries, including its life and general insurance and asset management businesses would have access to a bigger customer base of about 1.7 million customers and a wider reach through a larger combined branch network.
Analysts also see cost synergies to be derived from the possible merger, driven by improvement in deposit/funding mix and cheaper access to long-term deposit and capital market funding.
Citing an example, an analyst said the possible merger could result in operational efficiencies and drive branch administration and staff costs down by some 24.5% and 8.5% respectively.
It had been pointed out that Affin might not have sufficient financial muscle to undertake the deal on its own. However, Affin managing director Tan Sri Lodin Wok Kamaruddin was quoted in a news report that the banking group had the financial means to make a takeover bid for EON Cap.
This could be linked to the fact that Affin has shareholders with deep pockets, such as Lembaga Angkatan Tentera, which holds a 32% stake in the bank, and Hong Kong’s Bank of East Asia, which owns 22%.
It is believed that Affin’s key shareholders have already expressed their support for the transaction and would make substantial equity commitment, such as backing a rights issue to ensure proper capitalisation going forward.
Affin has sought the green light from Bank Negara to make a general offer for EON Cap. It was reported that Affin is offering between RM7.40 and RM7.60 per share and that it planned to fund the acquisition through a rights issue.
http://biz.thestar.com.my/news/story.asp?file=/2010/6/4/business/6397131&sec=business
By ELAINE ANG
elaine@thestar.com.my
Combined entity will have strong niche in SME and hire purchase segments
PETALING JAYA: The possible merger between Affin Holdings Bhd and EON Capital Bhd (EON Cap) could create a combined banking group with a strong niche in the small and medium enterprise (SME) and hire purchase banking segments.
“Affin’s strength is in SME loans while EON Cap’s focus is in the consumer hire purchase segment. The merger will enable the combined group to excel in niche areas such as the SME and hire purchase businesses. These areas have much potential for growth,” a source familiar with banking operations said.
The combined banking group will be in third position in terms of SME and hire purchase lending versus other listed peers with loans worth RM12.2bil and RM14.6bil respectively. The possible merger would also enable the group to develop new areas of business in bancassurance, corporate and investment banking, treasury and priority banking, the source said.
The possible merger of Affin, the eighth largest banking group in the country, with the seventh largest EON Cap, would result in the sixth largest bank by assets with combined assets totalling some RM83bil. It would also create a banking group with the fourth largest branch network in the country with 230 branches nationwide.
Analysts said Affin’s subsidiaries, including its life and general insurance and asset management businesses would have access to a bigger customer base of about 1.7 million customers and a wider reach through a larger combined branch network.
Analysts also see cost synergies to be derived from the possible merger, driven by improvement in deposit/funding mix and cheaper access to long-term deposit and capital market funding.
Citing an example, an analyst said the possible merger could result in operational efficiencies and drive branch administration and staff costs down by some 24.5% and 8.5% respectively.
It had been pointed out that Affin might not have sufficient financial muscle to undertake the deal on its own. However, Affin managing director Tan Sri Lodin Wok Kamaruddin was quoted in a news report that the banking group had the financial means to make a takeover bid for EON Cap.
This could be linked to the fact that Affin has shareholders with deep pockets, such as Lembaga Angkatan Tentera, which holds a 32% stake in the bank, and Hong Kong’s Bank of East Asia, which owns 22%.
It is believed that Affin’s key shareholders have already expressed their support for the transaction and would make substantial equity commitment, such as backing a rights issue to ensure proper capitalisation going forward.
Affin has sought the green light from Bank Negara to make a general offer for EON Cap. It was reported that Affin is offering between RM7.40 and RM7.60 per share and that it planned to fund the acquisition through a rights issue.
http://biz.thestar.com.my/news/story.asp?file=/2010/6/4/business/6397131&sec=business
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