Investor concern grows over CIMB activity

By NG MIN SHEN / pic by TMR filepic

Shareholder changes and the data breach news continue to weigh on CIMB Group Holdings Bhd, as reflected in the continued downward trend of the bank’s share price.

An industry analyst attributed the continuing slide in the banking group’s share price to the recent sales of shares by majority stakeholders, a board member’s reported jaunt into private-equity (PE) space and the aforementioned data loss.

“Investors are concerned since the Japanese shareholder pulled out, followed by Khazanah Nasional Bhd paring down its stake right after. Now, the chairman is reported to be planning to venture into PE,” the analyst, who declined to be named, told The Malaysian Reserve.

In September, Japan’s Mitsubishi UFJ Financial Group Inc exited the CIMB group by selling its entire 412 million shares, equivalent to a 4.6% stake in CIMB, via an overnight block trade.

A month later, Khazanah opted to sell 90.5 million shares in CIMB in the indicative price range of RM6.13 to RM6.24, which would raise up to RM564 million. Prior to that, the sovereign wealth fund held some 2.55 billion shares, or a 29.3% stake, in the lender.

The share sales have seen the banking group’s share price falling from a high of RM7 on Aug 31 to close at RM6 yesterday. The news of the banking group’s loss of magnetic tapes containing back-up data has not helped its share price’s course.

The speculative news of CIMB chairman Datuk Seri Mohd Nazir Razak working with four partners to start a regional PE fund has not helped investors confidence either.

“If he is really going into PE, that doesn’t exactly comfort investors, as his interest will be divided,” the expert said.

Quoting sources, the report stated Nazir will be joined by Kenny Kim, who was previously CFO at CIMB under Nazir; David Heng, who recently resigned as a senior MD at Temasek Holdings Pte Ltd; former Indonesian Trade Minister Gita Irawan Wirjawan; and former Philippines finance secretary Cesar Purisima.

The PE, which is said to be based in Singapore, is reportedly not connected to CIMB, and will be eyeing investments in the South-East Asian consumer, technology, logistics and financial services industries.

Nazir in March sold two million CIMB shares at RM5.69 per share for a total of RM11.38 million, leaving him with 44.51 million shares, or a 0.5% stake, in the lender.

On Monday, CIMB said it had lost several magnetic tapes containing back-up data including customer information during “routine operations”, although it reaffirmed the lost data had not been compromised. The lender added it was working with the relevant authorities on the matter and had heightened security measures across all channels to protect its customers, while all customer information is retained under the bank as the lost files were back-up data.

A bank-backed analyst said the impact of the data loss on CIMB will depend on the group’s response to the matter, in light of data breaches that have been taking place within the country of late.