MITSUBISHI UFJ Financial Group’s move to sell all its 412 million shares in CIMB Group Holdings Bhd sent the latter’s shares down in early trade yesterday.
Analysts, however, believe it was only a knee-jerk reaction and CIMB’s share price should move up again to reflect its fundamentals.
MUFG, through banking arm The Bank of Tokyo-Mitsubishi UFJ Ltd, sold all of its 412 million CIMB shares, or a 4.6 per cent stake, for an undisclosed amount.
This ended the Japanese banking giant’s ownership stake in Malaysia’s second-largest bank that started about 40 years ago.
CIMB said the divestment was part of MUFG’s strategic global master plan that included a review of its portfolio of existing investment in affiliates.
Bloomberg reported that MUFG raised RM2.56 billion from the sale. The group priced its sale at RM6.20 apiece, below the midpoint of a marketed range.
The disposal was done via an overnight block trade, said CIMB in a statement yesterday.
“It is just a knee-jerk reaction. Price is well supported at the RM6.20 level and increasing, technically speaking,” market expert Nazarry Rosli told NST Business.
“The shares were still trading above the 200-day Simple Moving Average, pointing out that they were on the uptrend,” he added.
CIMB shares dropped to a low of RM6.22 in early morning, but picked up steam to close at RM6.31. This was 15 sen, or 2.32 per cent, lower than Tuesday’s close of RM6.46.
Trading volume was 254.17 per cent higher than Tuesday with 71.77 million shares changing hands.
MUFG’s Asia and Oceania network spanned 15 countries, including Malaysia, where its presence had been enhanced by its capital investment in CIMB, which was made in stages from 1974.
Notwithstanding the divestment, both MUFG and CIMB would maintain their current collaboration founded on a mutually beneficial 40-year partnership, said CIMB.
Group chief executive officer Tengku Datuk Seri Zafrul Tengku Abdul Aziz said: “We have had a mutually rewarding relationship over the last 40 years and while MUFG’s capital priorities have necessitated this move, I am confident our relationship will remain strong.
“We will continue to be trusted business partners and look forward to further develop our collaboration in complementary areas.”
MUFG chief executive officer for Asia and Oceania Takayoshi Futae said as a global financial institution rooted in Asia, it had long been a committed partner to Malaysia’s growth.
“Over the years, our alliance with CIMB had deepened and we found ourselves collaborating broadly on areas ranging from Islamic finance and trade finance to infrastructure projects,” he added.