KUALA LUMPUR, Nov 17 — Shares of CIMB Group Holdings jumped almost 3 per cent to RM13.28 apiece after Malaysia’s largest investment bank announced plans for a separate listing on the Thai bourse yesterday.
When implemented, the proposal will make CIMB the first foreign company to be listed on the Thai bourse since the Securities and Exchange Commission of Thailand approved new guidelines for foreign listings in October.
CIMB told the Kuala Lumpur stock exchange in a statement yesterday that it intended to undertake an initial public offering of 35 million shares — one per cent of its paid-up capital — to local and institutional investors in Thailand
It also said that both sets of shares — in Kuala Lumpur and in Bangkok, respectively — would be fully fungible, that is to say, an investor could buy in Kuala Lumpur and sell in Bangkok if he so desired.
The IPO price has yet to be fixed but based on yesterday’s closing price, CIMB would fetch around RM465 million.
The proposal is a rarity for a Malaysian company as most of the dual listings in the country have stemmed from legacy issues. Even so, it illustrates the increasing regionalisation of South-east Asia and underscores CIMB’s regional aspirations.
The move will increase the bank’s profile in Thailand where it already has a presence: it owns 93.3 per cent of CIMB Thai Bank plc which is also listed on the Thai stock exchange.
It will also make CIMB an enormous presence in Thailand: based on its market capitalisation of US$13.7 billion, it would be among the three largest companies on the Thai stock exchange.
“As I see it, it has no downside,” said Chris Oh, the research head at JPMorgan in Kuala Lumpur.
“There is very little dilution and it’s telling investors that it’s willing to submit to more compliance from different regulators. That is very telling from a corporate governance, transparency point of view. And it could be the start of other listings in the region. Don’t forget it’s in Indonesia and Singapore as well.”
Is that possible?
“We’re committed to becoming South-east Asia’s most valued universal banking group,” CIMB’s chief executive Nazir Razak told BT. “This one is to emphasise our commitment to Thailand, so that we can better network with our Thai clients. As for other listings, we’ll take it one step at a time.”
The deal still awaits an array of approvals from both Malaysian and Thai authorities but, barring any unforeseen circumstances, it should be completed by the first half of 2010. — Business Times Singapore
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