metaverse

Most analysts have rated positively Public Bank, claiming that the sky is clear after news came out that the Teh family has employed a mix of "golden handcuffs" and a "corporate poison pill" strategy to make Public Bank less attractive for hostile takeovers. But doesn’t that seem contradictory? Why would the Teh family want to limit their own options if, one day, PNB came knocking on their door offering to buy their shares at double the market price?

A more logical explanation the Restricted Offer for Sale (ROS) was proposed by Public Bank's management as a "sweetener" to facilitate their purchase of LPI's shares from the Teh family. In reality, this ROS might clash with Bank Negara Malaysia (BNM)’s efforts to institutionalize the banking sector to engineer a MEGA BANK through forced mergers. Currently, Maybank has a market cap of USD 31.49 billion, while DBS sits at a massive USD 84.58 billion. Clearly, Malaysia’s banking sector has some catching up to do.

To navigate the potential outcomes, let’s consider the ANZ-AMBank as a case study. ANZ put up its 16.5% in AMBank via block trade at RM3.85 per share (compared to its NTA of RM6.05), which also represented a 8.3% discount to the closing price of RM4.20. Using Public Bank’s NTA of RM2.90 as a starting point, we can run a back-of-the-envelope calculation to estimate the potential impact on share price. If BNM approves the ROS, it would undoubtedly spark political resistance, as the ROS appears to directly undermine BNM's Financial Services Act 2013 (FSA). So the big question is whether BNM will challenge the ROS and block the deal to ensure the smooth progress of the consolidation of the banking sector. The answer seems obvious!

3 weeks ago

metaverse

The banking landscapes of Malaysia (GDP USD 460 billion) and Singapore (GDP USD 470 billion) may seem similar at first glance, but Malaysia is at least 30 years behind in terms of financial strength and sophistication. Singapore’s Monetary Authority successfully merged their local banks into just three MEGA Banks (DBS, UOB, OCBC), positioning them as strong players on the global stage. Meanwhile, Bank Negara Malaysia (BNM) still faces significant resistance from small and mid-sized local banks to consolidate. As a result, Malaysia’s banking environment remains closed door and lacking international competition.

There’s no doubt that Public Bank (NTA RM2.9) has been well-managed for decades, but the time has come for them to either lead the consolidation game and take out their cheque book to acquire smaller banks to transform into a MEGA Bank or risk being taken over by a more aggressive competitor. It’s no surprise that Public Bank has instilled a so-called "corporate poison pill" strategy to fence off hostile takeover, but this will only delay the process, but no way they can reverse the MEGA TREND engineered by BNM so the day is numbered as the forced merger may come sooner than anyone's expectation.

As for those who are naysaying about the bad fengshui of Public Bank (NTA RM2.9) and AMBank (NTA RM6), perhaps they should check out Affin Bank's (NTA RM4.7) new headquarters at TRX. Since they moved into their new building, their positive QI has been rising like a super star! Coincidence?

https://www.youtube.com/watch?v=r8ljTakTHOo&t=139s

3 weeks ago

metaverse

Malaysia’s Southern Bank rejects hostile offer

The robust defence from the country’s second-smallest bank sets the scene for a highly charged takeover battle, the largest in Malaysia’s financial sector to date and one that could result in one of the biggest deals in south-east Asia this year.

Southern Bank’s blunt statement to the stock exchange did not identify its potential alternative partner. But it said it had asked the central bank for permission to enter into negotiations, a local requirement.

“The board believes an alternative takeover partner will be available that will maximise value to our shareholders,” Southern said, describing the would-be partner as a “major local financial institution”.

Hong Leong Bank and Public Bank have been widely touted as possible partners for Southern, which said last week it was looking for a “white knight” suitor after months of talks with BCH failed to yield a friendly deal.

https://www.ft.com/content/f0b07fc0-9d4a-11da-b1c6-0000779e2340

3 weeks ago

metaverse

The proposed takeover of EONCap by HLBB has all the makings of a replay of the hostile takeover of Southern Bank Bhd (SBB) by the CIMB Group back in 2005.

industry observers say there have been indications that HLBB isn’t willing to pay anything above 1.3-1.5 times price-to-book value (PBV) for EONCap, based on its rather low return on equity (ROE) of 4.2% and return on assets of 0.3% in FY2008.

Thus, based on its 2008 book value (BV) of RM4.62, this works out to between RM6.15 and RM7.10 a share. EONCap’s projected BV for 2009 is RM5.05 — which means that the price that Quek may be willing to pay is anything between RM6.76 and RM7.50 a share.

https://theedgemalaysia.com/article/cover-story-quek-prowl

3 weeks ago

metaverse

Banking M&A from 0.93x to 2.35x of book value:

2018 Asian Finance Bank Berhad MBSB 1.30
2013 Bank Islam Malaysia Berhad BIMB Holdings Berhad 1.88
2013 Hwang DBS Affin Holdings 1.28
2012 OSK Investment Bank Berhad RHB Capital Berhad 1.77
2012 ECM Libra Investment Bank Berhad Kenanga Investment Bank Berhad 1.27
2011 RHB Capital Berhad Aabar Investments 2.35
2011 EON Capital Berhad Hong Leong Bank Berhad 1.42
2008 Bank Muamalat Malaysia Berhad DRB-Hicom Berhad 2.15
2008 EON Capital Berhad Primus Pacific Partners 2.21
2008 RHB Capital Berhad Abu Dhabi Commercial Bank 2.18
2007 Affin Holdings Bank of East Asia 1.30
2007 MIDF PNB 0.93
2007 RHB Capital Berhad Employees Provident Fund of Malaysia 1.76
2007 AMMB Holdings Berhad Australia and New Zealand Banking Group 1.29

(Courtesy of Beluga from Affin Bank forum)

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Quick Note: if Public Bank decided to standstill like a lame duck and be taken over by other bank to call it a day the floor price should be around RM4.35 or 1.5x of book value. However if they decided to stand like a man and put up a big fight to become MEGA BANK vis-a-vis Maybank and RHB , it will be an expensive war and a nightmare so the floor price should around RM2.9 or could be much lower if EPF and PNB refused to give up the fight.

3 weeks ago

speakup

cheapest bank for M&A is actually Mbsb!

3 weeks ago

cnyang

Speakup, please elaborate with some datas and numbers please. Thank you

3 weeks ago

stncws

meta is too old , oldman thiking

3 weeks ago

metaverse

Global fund managers, led by George Soros, and tech moguls like Elon Musk are all-in for Trump's victory. Trump’s policies, which have shown more consistency (for better or worse) than Biden’s often indecisive approach, could trigger hyperinflation and force the Fed to hike the interest rate, strengthening the USD, reversing USD carry trades, and adding downward pressure on the ringgit.

Trump will mandate U.S. firms to bring operations back to the U.S. and restrict outsourcing jobs. The “China plus one” strategy sounds feasible on paper (try to fool or cheat the U.S. trade sanctions) but practically self-contradictory as this kind of "cheating game" will not last long.

After Trump is elected into office, Elon Musk will push fully his futuristic plans. The Optimus humanoid robot, along with xAI and Starlink, will be integrated nationwide to automate American factories, with robots handling production and driverless cars delivering goods to create an advanced infrastructure that could reduce reliance on human labor.

3 weeks ago

metaverse

Terima baik, the market is expected to totally meltdown if the index failed to hold 1580 so be prepared for a perfect storm and fasten the seatbelt.

If PBB swing below RM4.4 it is better to avoid this stock. Let's say PBB can give you dividend yield of 4.8% but due to unforeseeable financial crisis PPB crashed to RM2.9 or a paper loss of 34% so at RM4.4, is this a good value buy? The answer seems obvious.

Once bitten, twice shy. George Soros was looking for an easy target to attack, so when Anwar was Finance Minister in 1997, our economy was attacked by Soros, and then fast forward to 2024, and Anwar is still our Finance Minister, and most of the promised reform failed to materialize, and most of the 1997 problems are still inherited in 2024. Coincidence?

Although most people think that lighting will not hit the same spot twice but believe it or not, this long-held myth is far from the truth as the chances of lightning striking the same place twice are actually very high (maybe due to gravity forces or magnetic field).

2 weeks ago

metaverse

Republican Ronald Reagan, who was a cowboy actor, and Republican Donald Trump shared a lot of similar personality (including their belief in astrology) and secured the strongest mandates in American history, so Trump's economic policy is expected to resemble Reaganomics (increasing defense spending, balancing the federal budget, slowing government spending, reducing federal income tax, reducing government regulation, and tightening the money supply in order to reduce inflation).

Reagan's political move to demolish the Berlin Wall was a prelude to the downfall of the Soviet Union, pushing Stalinism back to square one. Similarly, with the sanction of Russia's oil and the freezing of USD foreign reserves, Russia is running out of financial resources to fight the Ukraine war, so Putin may gradually retreat and Trump would march forward to end the Ukraine conflict, as the war was started by Democrat Biden.

However, the Middle East conflict, which was started by Republican Bush to protect the petrodollar and his family oil business, will likely continue and escalate further. The Republicans, essentially an oil cartel, understand that any military withdrawal from the Middle East could lead to the collapse of the US dollar. For the same reasons, tensions in the South China Sea will remain high, allowing Trump to pressure South Korea, Japan, and Taiwan for protection money and force them to relocate their factories to the US.

Just like Reagan's defense system dubbed "Star Wars," Trump will push for a similar "Star War" with the help of Elon Musk's Starlink, so the trade war with China will be escalated to a cold war similar to the cold war with the Soviet Union. The whole world will be divided into two parts, and all nations have to pick a side.

With the escalated trade war (and cold war), China may totally withdraw from the US market and look for other regions to dump their goods, and this paradigm shift is expected to adversely affect nearby countries like Malaysia and Indonesia, forcing them to strengthen their anti-dumping laws and establish trade barriers against China, so the outlook of the global economy for the coming years is rather gloomy as some emerging countries may see a currency crisis or a crash in their stock market.

In fact, some history experts reckon that the current situation resembles that of WW1 and WW2, which were started by trade wars (to compete for natural resources) and then latest escalated into military wars.

1 week ago