KUALA LUMPUR, May 29 – The Employees Provident Fund (EPF) will let RHB Capital Bhd (RHBCap) and Malaysia Building Society Bhd (MBSB) decide on merger plans.
The EPF holds a 44.84 per cent stake in RHBCap and a 65.5 per cent stake in MBSB, a non-bank lender to civil servants.
“We will wait for the two companies to decide what they want to do and there will be a few announcements to be made,” EPF chief executive officer, Datuk Shahril Ridza Ridzuan told a media briefing here on Tuesday.
“The fact that EPF is a big shareholder in RHBCap and MBSB tends to let people draw an assumption that we are going to do something about the two, but this is not necessarily the case,” he said.
The merger plan should take into account current strategies of the two businesses, the business model and future in finance industry.
MBSB for instance, is already on the path towards becoming a bank and has invested in a core banking system, while in constant contact with the authorities on this issue.
“There will be a case of MBSB just continuing to transform into a banking platform on its own or maybe go through a merger and acquisition, if it makes sense,” he said.
The talk that RHBCap is eyeing MBSB has been ongoing for about a year. Recently, MBSB president/chief executive officer Datuk Ahmad Zaini Othman said the matter was best left to shareholders to decide. “We can go on a standalone basis or via a merger with RHB Bank, if shareholders think that’s the right direction,” he told a press conference after MBSB’s annual general meeting.
In another development, Shahril Ridza said EPF is now taking a wait and see attitude on Petroliam Nasional Bhd’s (Petronas) plans to privatise MISC Bhd. EPF, which held a 9.5 per cent stake in MISC as of April 12, has accepted Petronas’ revised offer price of RM5.50 per share from RM5.30.
“We felt the offer was quite fair. So, we can take the money and reinvest in other things to get a six per cent yield, rather than leave it in MISC,” he added.
Shahril Ridza said the EPF had no big desire to be involved in shipping but only wants investments that pay good dividends.
“We aim to pay dividends of at least the inflation rate plus two per cent to contributors.
“MISC has had trouble paying a dividend for the past few years and may have trouble doing so in the next few years as well.
“It’s a good time for us to exit with cash and invest it elsewhere. It’s faster for us to make money if we have the cash and do something else,” he added. He said the EPF is now starting to look for investments in three asset classes, namely, fixed income, equity and real assets comprising property, infrastructure and companies in core European countries such as Germany, France and Spain.
He said it will only invest in the most investable companies, bluechips, those with high liquidity and very big market caps. On the property side, the EPF will focus on markets that provide a comfortable legal and tax structure, such as the United Kingdom, Australia and Singapore.
The EPF invests less than two per cent in the property sector from the RM536.5 billion assets and funds under management. It has invested at present up to 65 per cent of its assets in fixed income and 35 per cent in equities.
As for fixed income, Shahril Ridza said the EPF emphasises on strong credit, single “A” and above type of markets.
– BERNAMA
