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)
CIMB Group Holdings Bhd and Malayan Banking Bhd fell after HwangDBS Vickers Research Sdn Bhd said the Indonesian central bank’s plan to limit investor ownership in commercial banks may hurt earnings.
Shares of CIMB, which owns an Indonesian bank, slid 1.4 per cent to RM8.44 at 9:30 a.m. in Kuala Lumpur trading, set for the lowest close since June 15.
Malayan Banking, or Maybank, lost 1 per cent to RM8.73.
The plan, if passed, is “negative,” more so for CIMB than Maybank, HwangDBS said in a report today. -- Bloomberg
The FTSE Bursa Malaysia Kuala Lumpur Composite Index (FBM KLCI) retracts 5.53 points to 1,589.21 at 10.15 a.m. this morning.
Turnover was at RM163.9mil involving the trading of 168 million shares.
Leading the local bourse were the losers with 231 counters down, 165 up and 221 remained unchanged.
The top three gainers were Nestle that increased by 40 sen to RM47.70, Panamy climbed 28 sen to RM24.40 and KLK was up 16 sen RM22.82.
For the heavyweights, CIMB slid 7 sen to RM8.85, Axiata was down 3 sen to RM5.02 and Maxis remained unchanged at RM5.50.
On regional bourses, Nikkei 225 was down 48.17 points to 10,089.56, the Shanghai Composite was 11.48 points to 2,786.29 and the Hang Seng Index slid 228.44 points to 22,497.99.
Others like the Taiwan Taiex Index also fell by 84.58 points to 8,664.97, Kospi Index decrease by 17.90 points to 2,162.45 while the Straits Times Index was also down by 22.80 points to 3,128.48.
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