I was having lunch appointment with my fellow friends from Singapore the other day and the conversation somehow found its way to the topic of politics and economy. While Malaysia celebrated its’ highest annual inflation rate (7.7 percent) in 27-year last month thanks to the government’s fuel hike, the same rate of inflation has already reached Singapore’s soil. Singaporeans are grumbling about the high inflation as well especially the hike in the GST. They also grumble about high price of health-care and they admire how lucky Malaysians are in enjoying RM2.00 medical fees from the government hospital *grin*. I told them that they should be thankful because their government takes good care of the basic necessities such as education, transportation, housing and even allowance for their kids but they seemed to be unsatisfied and want more *sigh*.

Then our conversation entered the topic of Anwar and it appears Singaporeans are enjoying the latest happenings very much and you should hear with your own ears their admiration for RPK (Raja Petra Kamarudin). They wish somehow they could have their own version of RPK but then I told them their version of RPK would be freaking boring compared to Malaysian’ simply because their politicians, police and other agencies are too obedient and are not as creative as Malaysian *feel proud for a moment*. My Singaporean friends agreed and asked me whether it was true that there were hanky-panky in the Malayan Banking Berhad’s (KLSE: MAYBANK, stock-code 1155) US$2.7 billion offer for PT Bank Internasional Indonesia (JAK: BNII) as per-rumors. I wish I could tell them straight on their face that the transaction was as clean as Clorox.

Based on the latest development in the banking industry, it seems Maybank is set to incur great losses before the Malaysia’s biggest lender could even make its first penny from the controversial acquisition. Maybank’s stock was dumped by institutional investors after it agreed to pay exorbitant price for BII in Mar 2008. And now the bank said it had received a letter from Bank Negara Malaysia (Central Bank) that due to recent changes of take-over rule enacted by the Indonesian Government on June 30, its approval given under Section 29 of the Banking and Financial Institutions Act 1989 (BAFIA) for the proposed acquisition via its letter dated March 25 has been revoked.

Under the New Take-Over Rule, Indonesia’s capital market has raised the threshold for tender offers in takeovers to 50 percent from 25 percent and requires a buyer to sell some shares to ensure the target company will have a 20 percent free float within two years after the tender offer. It was reported that Maybank had a meeting with Indonesia’s Capital Market Supervisory Agency to ask for a waiver from the new ruling but its appeal was rejected last week. Considering that Maybank had paid a whopping 23 percent premium on BII’s shares, the highest premium ever paid by a foreign buyer for an Indonesian bank, could Maybank suffer the same quantum of losses from potential stock selling down? It’s no fun to lose money before you can even make a penny out of it, don’t you think? Sure, blame it on Indonesian authorities again.

Other Articles That May Interest You …

• MPs grill Maybank CEO – let the worms come wriggling
• Why you should avoid Maybank stock – Money Sucked Out
• Hanky-Panky in Maybank-BII deal? How about MAS?
• Maybank’s stock punished after $2.7 billion BII purchase

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July 29th, 2008 by financetwitter

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