MALAYSIA PRESS-RHB to conclude 40 pct stake in Indonesian bank by early Q3-The Sun

Thu Mar 21, 2013 9:59pm EDT

Related Topics

RHB Capital Bhd, the country's fourth largest lender, expects its acquisition of a 40 percent stake in Indonesia's PT Bank Mestika Dharma to conclude by the third quarter of this year, said RHB Bank Bhd managing director Johari Abdul Muid.

"It (acquisition process) is going on well. The new rules (on bank ownership limits) have been proposed by Indonesia's central bank so we're progressing in terms of the purchase of our stake in Bank Mestika. We're almost there," he told reporters after the RHB "Win a Volkswagen Beetle" contest prize-giving ceremony in Kuala Lumpur on Thursday.

RHB Capital first proposed to buy an 80 percent stake in Bank Mestika in 2009 but faced hiccups following Bank Indonesia's ruling that limits foreign financial institutions' holdings of local banks to 40 percent.

Last year, RHB Capital had aimed to complete its acquisition of the Indonesian bank by June 2013. -The Sun

----

PREVIOUS ITEMS:

Foreign holding of gov't securities a good sign but risks remain-The Edge

The significant increase in foreign shareholding in Malaysian government securities (MGS) since the global financial crisis is generally a good thing. But it could still be a cause for concern and remains a risk, according to Ravi Balakrishnan, Singapore-based resident representative of the International Monetary Fund.

Speaking on Thursday at a seminar on Bank Negara Malaysia's governor's address on the Malaysian economy, Ravi said the foreign holdings of MGS, currently at about 25 percent are a statement to the stability of the Malaysian market. Foreign holdings of Bank Negara bills tend to fluctuate, but have previously reached close to 75 percent.

"One risk which people focus on is the risk related to capital flow. It's a good thing because it shows that foreigners are interested in Malaysia, but further inflows can cause asset price imbalances and we could also see a significant amount of outflows.

"To be fair, we have seen quite a lot of these periods over the last couple of years and it hasn't really affected Malaysia's domestic credit provision, so Malaysia has managed well so far, but it still remains a risk given the level of exposure that foreigners now have to Malaysia, and the potential shocks out there," he said. -The Edge

----

NOTE: Reuters has not verified these stories and does not vouch for their accuracy.

FILED UNDER:
Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.