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| Alliance Financial Group Bhd is the the country’s smallest banking group by assets. |
KUALA LUMPUR: Alliance Financial Group Bhd’s (AFG) share price rose to a high of RM4.36 on Tuesday after three new names emerged in Langkah Bahagia Sdn Bhd and this could possibly lead to further corporate developments.
At RM4.36, the share price of AFG, the country’s smallest banking group by assets, was the highest since July 2015.
At 11am, it was trading at RM4.30, up 12 sen. There were 843,000 shares done at prices ranging from RM4.15 to RM4.36.
The FBM KLCI was down 1.08 points or 0.06% to 1,714.20. Turnover was 629.28 million shares valued at RM338.49mil. There were 241 gainers, 285 losers and 310 counters unchanged.
Langkah Bahagia owns a substantial stake, through Vertical Theme Sdn Bhd, in AFG.
UOB Kay Hian Research said the acquisition of Langkah Bahagia’s indirect stake in AFG by Ong Beng Seng, Ong Tiong Sin and Seow Lun Hoo "could be potentially viewed as a precursor for an entry of further corporate developments".
It pointed out that two of the three individuals (Seow Lun Hoo and Ong Tiong Sin) are owners of private equity/advisory firms: Newfields Advisors and RRJ Capital.
“That said, we believe that the earlier corporate development involving the potential entry of DBS is unlikely to materialise due to the punitive deduction on CET1 that DBS would have to incur if it were to acquire a stake in AFG,” it said.
UOB Kay Hian Research maintained its Hold and target price of RM3.95.
It pointed out that as the entry of the new shareholders will not trigger a MGO or have any immediate- to medium-term effect on the business operations of the group which continues to be professionally run with key board representative from Temasek Holdings Pte Ltd, “we make no changes to our forecast and valuations”.
Last Friday, the three emerged as shareholders in Langkah Bahagia after Lutfiah Ismail disposed of her entire stake in the company to them. Lutfiah was a board member in AFG but her name does not appear as a director in the report for the financial year ended Dec 31, 2015.
Vertical Theme, 51% owned by Langkah Bahagia and 49% owned by Duxton Investments Pte Ltd, has a 29.06% stake in AFG.
Duxton represents the Singaporean government’s investment arm, Temasek Holdings Pte Ltd.
Effectively, Langkah Bahagia, which used to be linked to former Finance Minister Tun Daim Zainuddin, has a 14.8% indirect stake in AFG through its stake in Vertical Theme with Temasek holding a 14.2% indirect stake.
AFG (2488) - Alliance Financial Group Bhd (AFG, 2488) climbs to July 2015 high on reports of new shareholders
http://www.thestar.com.my/business/business-news/2016/04/12/afg-climbs-on-reports-of-new-shareholders/
