SINGAPORE, Jan 7 (Reuters) - Oversea-Chinese Banking Corporation Ltd was headed for a fourth straight session of falls after the company said it is in talks to acquire Hong Kong’s Wing Hang Bank, while the Singapore index rebounded after a two-day losing streak.
The benchmark Straits Times Index gained 0.2 percent to 3,131.26 points by 0436 GMT, while the MSCI’s broadest index of Asia-Pacific shares outside Japan eased 0.2 percent.
OCBC shares fell as much as 1.4 percent to a near one-month low at S$9.73, on concerns about the high price tag of the deal. More than 11 million shares were traded, three times its average 30-day full-day volume.
“Wing Hang is a moderate-sized asset in an unattractive market,” CIMB analysts said in a research note.
“We think OCBC should be well aware of this and not bid aggressively just for a better position to capture future Asian trade business.”
CIMB expected OCBC’s share price to remain under pressure from overpaying concerns.
OCBC, Singapore’s second-largest bank, gained 4.8 percent last year, lagging behind a 15 percent rally in bigger rival DBS Group Holdings Ltd and a 7.2 percent rise in United Overseas Bank Ltd.
CIMB is more positive on Singapore banks than their peers in Southeast Asia, as Singapore is evolving as a funding centre for Asian trade, which should more than offset weaker domestic loan demand.
Among other stocks, shares of Singapore Technologies Engineering Ltd edged down 0.3 percent to S$3.87, shrugging off an announcement on Monday that its marine arm, Singapore Technologies Marine Ltd, secured new orders worth about S$446 million ($351.75 million) in the fourth quarter of 2013.