AMMB tumbles on huge 1MDB global settlement
SHARES in AMMB Holdings Bhd, the country’s sixth largest bank by assets, tumbled to a four-month low on Wednesday after trade resumed following the announcement that it had agreed last week to accept a massive RM2.83bil global settlement over its role in the 1MDB scandal.
AMMB said the global settlement will impact its financial results in the last quarter ended March 31.
One of its main shareholders, Australia and New Zealand Banking Group (ANZ), announced on Monday that it will take a A$212mil (RM672mil) haircut on the carrying value of its 24% stake in AMMB.
The 1MDB settlement would remove a risk for any potential acquirer of ANZ’s stake in AMMB. It was reported that ANZ is in the process of selling some of its investments in Asia, including in AMMB, to focus on its core Australian market.
In 2017, AMMB and RHB Bank Bhd unexpectedly abandoned merger talks. While it was never confirmed, there were speculations that AMMB risks relating to 1MDB were one of the stumbling blocks to the merger.
Shares in AMMB clawed back some of its losses yesterday but at RM2.91, the stock was down by almost a fifth year-to-date.
Deloitte agrees to pay RM324mil over IMDB, SRC audit matters
DELOITTE PLT has agreed to pay a hefty RM324mil (US$80mil) settlement to resolve all claims related to its fiduciary duty on auditing the accounts of 1MDB and SRC International Sdn Bhd for the period 2011-2014, the Finance Ministry said on Wednesday.
Finance Minister Tengku Datuk Seri Utama Zafrul Abdul Aziz said the settlement was the largest 1MDB-related settlement by an audit firm in South-East Asia.
“This settlement will not affect or compromise Malaysia’s claims against individuals like Jho Low and other parties related thereto, and who are still being actively pursued in relation to the 1MDB scandal, ” he said.
In 2019, the Securities Commission fined Deloitte RM2.2mil for failing to report irregularities in relation to an Islamic bond issued by a 1MDB-linked company.
After the US Justice Department filed civil lawsuits in 2016 over 1MDB, Deloitte said the 1MDB finance statements it had audited should no longer be relied upon.
Deloitte was 1MDB’s third auditor before resigning in 2016. The firm followed EY, whose contract was terminated before 1MDB submitted its first financial statement, and KPMG which was fired in 2013.
Dilution worries overblown
TOP GLOVE fell further this week after a plan announced last Friday to raise as much as RM7.77bil by issuing new shares in Hong Kong sparked a fresh round of sell-off, as some analysts cautioned that the move would dilute the glove maker’s future earnings by as much as 15%.
Top Glove said the move would substantially increase its cash pile, allowing the company the flexibility to fund expansion as well as raise its international profile. The proposed listing would allow investors to buy and sell shares in Top Glove across three exchanges – in Malaysia, Singapore and Hong Kong.
Top Glove is scheduled to release its second quarter earnings next Tuesday. It made a net profit of RM2.4bil in the first quarter.
Analysts predicted that the company would make a net profit of at least RM10bil in the financial year ending Aug 31,2021.
At RM5 a share, the company was valued at about RM40bil.
Tight supply lifts CPO prices in February
CONCERNS over low palm oil inventory level and tight edible oil supply worldwide propelled the average crude palm oil (CPO) price up 4% in February to RM3,897 a tonne compared with January.
At the current level, the average CPO price is 44% higher from where it was a year ago, according to CGS CIMB Research.
The firm predicted the prices may have peaked and is likely to average between RM3,200 and RM3,700 in March.
Recent statistics from cargo surveyors suggested that the high prices in February have curbed buyers’ appetite for palm oil, while at the same time output from local plantations were seen recovering from seasonally low production period.
The Malaysian Palm oil Board is expected to release its official monthly industry statistics next week.