UPDATE 2-CIMB Thai soars on Malaysian parent listing plan

* CIMB stock surges 30 pct to its daily ceiling

* Malaysian parent plans to list in Thailand next year

* Helps enchance regional branding, profile - analysts (Adds comment from Kuala Lumpur)

By Arada Kultawanich

BANGKOK, Nov 17 (Reuters) - Shares of CIMB Thai Bank CIMBT.BK shot up 30 percent on Tuesday after its big Malaysian parent announced it would list in Thailand in a move that will expand its regional brand and diversify its funding.

The first foreign company to plan a dual listing in Bangkok stoked speculation the Thai unit might delist, putting a premium on its stock, despite assurances from the company that we "will continue to be listed on the market for now."

CIMB Group Holdings (CIMB.KL), Malaysia's second-biggest lender by assets, will tap a stock market that has climbed 57 percent this year, while building momentum in its regional brand and grabbing a bigger slice of the lending business in Southeast Asia's second-biggest economy, industry analysts said.

CIMB Group has a market value of $13.7 billion and after its listing it would become one of the three biggest companies on the Thai bourse, as well as the largest financial group.

Thailand's largest lender, Bangkok Bank BBL.BK, is valued at $6.5 billion.

"Time after time, we are impressed with CIMBs ability to read the market so well and its capability in obtaining high valuations for deals that it enters," Kuala Lumpur-based Kenanga Investment Bank said in a note to clients.

"The group is taking the opportunity of elevated valuations to raise cash for its working capital and to de-gear itself."

Some analysts said the low liquidity of CIMB Thai stock exaggerated its price movements on Tuesday. Only 6.85 percent of paid-up registered capital, or 914 million shares, is publicly listed on the Thai bourse.

"The jump should be short-lived as the stock normally has no liquidity, while its fundamental haven't changed that much," said Kosin Sripaiboon, head of research of UOB Kayhian Securities.

The Malaysian bank owns 94 percent of CIMB Thai Bank. It also owns a banking unit in Indonesia, Indonesia's Bank CIMB Niaga Tbk (BNGA.JK), with the Thai unit representing less than 5.5 percent of the group's total assets.

RAISING REGIONAL PROFILE

CIMB Group plans to raise about 4.5 billion baht ($136 million) by selling up to 35 million of its own shares in an initial public offering in Thailand by mid-2010. [ID:nBKK350421]

Shares in CIMB Thai, valued at $719 million, were up 29.6 percent at 2.32 baht, the highest since December 2006, while the main Thai index .SETI was up 0.13 percent at 0814 GMT.

The 30 percent rise was the maximum according to a ceiling on the Thai bourse, which restricts daily price movements to 30 percent in either direction. Trading continues once the ceiling or floor is hit, but deals must be done inside the limit.

Shares of the Malaysian parent lost 1.2 percent by 0820 GMT.

The CIMB's listing plan came after Malaysia's biggest mobile phone operator Maxis Bhd announced plans to raise $3.3 billion in Southeast Asia's biggest ever initial public offering, as firms rush to take advantage of recovering markets. [ID:nSP472385]

Some analysts said CIMB Thai would benefit from the listing plan by gaining fee income from handling the public offering.

"It makes sense for CIMB's strategy as it wants to be one of the biggest banks in Thailand and the listing would help its profile here," said a dealer at a foreign brokerage house who declined to be identified.

CIMB bought a stake in BankThai from a Thai central bank unit in 2008 and completed its acquisition early this year.

CIMB Thai unit has said it expected to return to the black this year for the first time in four years thanks to higher net interest margins and lower provisions. [ID:BKK429856]

The bank reported net earnings of 461 million baht ($13.84 million) in the July-September quarter, reducing its net loss to 40.6 million baht in the first nine months. ($1=33.19 Baht) (Additional reporting by Khettiya Jittapong in Bangkok and Julie Goh in Kuala Lumpur. Editing by Jason Szep)