Yesterday, KWAP declared that it bought 24.4 million shares in Commerce Asset-Holding Berhad (CAHB), the owner of the second largest bank in the country, late last month and is now now a substantial shareholder with a 2.07 per cent stake in its maiden purchase of the parent of Bumiputra-Commerce Bank.
Singapore Business Times today report that although KWAP said it acquired the shares on the open market, analysts said KWAP could have purchased some of the shares from substantial shareholders as only 1.2 million CAHB shares changed hands in the market on the transaction date of March 22. Furthermore, only a handful of owners own more than 2 per cent of CAHB.
The Singapore Business Times report said:
“According to its annual report, the major CAHB shareholders are the Ministry of Finance (16.75 per cent), Khazanah Nasional (15.03 per cent), New Straits Times Press (12.85 per cent), Renong Bhd (12.16 per cent), the Employees Provident Fund (9.3 per cent), Sanwa Bank (4.56 per cent), and Capital Group (2.84 per cent).
“The seller or sellers of the shares have yet to disclose their disposals.
“But the sellers are not likely to be fellow government agencies like Khazanah or the EPF, which have been mopping up shares of CAHB and other Malaysian companies in the last few months.
“It is still not known if the shares had belonged to Renong or NSTP. The two companies have been trying to unload their CAHB stakes in the last two years to pare down their debts.
“A dealer said the shares could have come from Capital Group. The US fund manager has disposed of seven million CAHB shares in the last four months, but still owns about 26 million CAHB shares.
“KWAP, which manages the country's pension funds for 800,000 retirees, is likely to be sitting on a huge paper loss of almost RM44 million (S$20.9 million) from its investment in CAHB.”
“The pension fund did not disclose the purchase price, but the shares were worth RM169.4 million based on the market price of RM6.95 on the acquisition date.
“CAHB's share price has since eased to RM5.15 yesterday, valuing the Kwap investment at RM125.5 million.
“Kwap's recent aggressive streak in the Malaysian bourse has raised eyebrows though.
“Last month, Kwap, which comes under the office of Finance Minister Daim Zainuddin, disclosed that it coughed up RM904 million in cash to take up 273.9 million unwanted Time dotCom shares at RM3.30 apiece following its dismal IPO.
“Time dotCom, which is part of the Renong stable, closed at RM1.99 yesterday.
“And in December, Kwap bought Brunei Investment Agency's entire 70 million shares in national carrier Malaysian Airline System at RM4 apiece. MAS closed at RM2.60 yesterday. Kwap is now sitting on an estimated whopping paper loss of RM500 million from its recent investments in Time dotCom, MAS and CAHB.”