Japan-based Bank Daiwa eyes Affin Hwang IB stake

PETALING JAYA: Japan-based Investment Bank Daiwa Securities Group Inc will begin talks to acquire a minority stake in Affin Hwang Investment Bank Bhd (formerly known as HwangDBS Investment Bank Bhd).

Affin Holdings Bhd said in an announcement to Bursa Malaysia that Bank Negara had given both parties the green light for these negotations noting that it “had no objection in principle.”

The approval is subject to both parties concluding negotiations within six months from Bank Negara’s letter of approval dated April 29.

“The said approval should not be construed as approval for the proposal. Upon concluding negotiations, Daiwa and Affin would be required to obtain the prior approval of Bank Negara pursuant to the Financial Services Act 2013, before entering into any agreement to effect the proposal,” it said.

The collaboration between Daiwa and Affin first began at the end of 2013 through a business alliance wherein Affin IB’s research reports were shared with Daiwa’s global client base and similarly Daiwa’s research reports were shared with Affin’s client base on a co-branded basis.

The business arrangement then also provided additional revenue to Affin IB as Daiwa Securities had channelled all its clients’ trades for shares on Bursa Malaysia through the former while the same was also applied vice versa.

Last year, Affin said that this business allliance had seen Affin receiving sales due to inbound investments into Malaysia from Japan and had hoped that outbound investments would also eventually happen.

Should a stake acquisition eventually happen by Daiwa into Affin IB, it would be the second significant stake acqusition for the group after the China and Hong Kong-based Bank of East Asia Ltd (BEA) took up a 23.5% stake in Affin Holdings.

BEA, the largest independent local bank in Hong Kong, first surfaced as a substantial shareholder in Affin Holdings back in June 2007.

BEA is now Affin’s second-largest shareholder. Affin Holdings’ other major shareholders are the Armed Forces Fund Board and Boustead Holdings Bhd with 35.28% and 20.69% stakes respectively.

Affin’s shares, which had been trading in a tight range for the year-to-date period, fell 1 sen to close at RM2.92 yesterday with some 21,500 shares changing hands.