Drop in CIMB share price due to foreign selling

KUALA LUMPUR: The recent decline in CIMB Group Holdings Bhd's share price was due to selling by foreign shareholders amid concerns of slower growth, says its chief executive Datuk Seri Nazir Razak.

"I had expressed some caution over the environment and CIMB's intention to move cautiously, and maybe some foreign investors interpreted that as slower growth.

"If they valued CIMB for high growth, then maybe, they would want to reduce their holdings in it," Nazir told reporters after distributing 5,000 special CIMB Touch 'n Go Cards to motorists at the Gombak Toll Plaza, here on Saturday.

CIMB has a foreign ownership of 38.4 per cent.

"The share price is determined by investors. What we do is to manage the company over the long term and also be as transparent as possible in terms of our strategy," he said.

CIMB's share price dropped a staggering 11.2 per cent over the week to close at RM7.04 last Friday and also marked a new one-year low.

Asked about a possible threat to growth in Asia due to the US position of instituting no new measures to boost the economy, Nazir said the probability of a double-dip recession is reasonably high.

He said a double-dip recession this time would affect the world and no economy would be able to offset the pressure as in the 2008 crisis.

"The bottom line is, in Malaysia, we are fortunate that the banking system is robust and the economy is well-balanced. So, I think that even a double-dip won't be so severe in the country," he added.

Nazir said that people have to handle such an environment sensibly in terms of balancing their own finances and reducing debt.(Bernama)