Kenanga to take full control of futures broking subsidiary

New high for Dagang NeXchange Bhd

KUALA LUMPUR: Kenanga Investment Bank Bhd (KIBB) is acquiring the remaining 27% stake in Kenanga Deutsche Futures Sdn Bhd (KDF) that it does not own.

In a filing with Bursa Malaysia, the independent investment bank said it was buying the 1.35 million shares in the futures broker from its substantial shareholder Deutsche Asia Pacific Holdings Pte Ltd for RM10mil, based on KDF’s net tangible assets (NTA) per share as at Dec 31, 2016.

(The purchase consideration will change if the NTA changes by the last day of the calendar month immediately preceding the completion date, which is five business days after the last condition precedent is completed.)     

Deutsche Asia Pacific, which owns 8.2% equity interest in KIBB, had held the 27% stake in KDF since KDF was set up about 22 years ago. 

KIBB said the proposed purchase would allow it to have full control over KDF, enabling efficient decision making process and allowing KIBB to take a long-term strategy.

According to KIBB’s annual report, the futures business recorded lower profit before tax of RM2.6mil in the financial year ended Dec 31, 2016, compared to RM5.7mil in the preceding year, mainly due to lower commission income earned. 

Income fell mainly due to lower levels of client activities amid the sluggish market conditions, it said.

KIBB’s biggest shareholder is the Cahya Mata Sarawak group with a 25.38% stake as at March 31.