KUALA LUMPUR (Jan 11): Hong Leong Bank Bhd’s (HLBB) shares, which fell in morning trade on Friday, rose in the afternoon following speculation that its sister company Hong Leong Capital Bhd (HL Cap) would be privatised.
At the noon break, the trading of Hong Leong Financial Group Bhd’s shares, along with those of its 79.09%-owned subsidiary HL Cap, were suspended.
HL Cap’s shares had gained 9.2% to RM1.42 over the past week before being suspended today.
At the close of trading at 5pm, HLBB shares had risen 14 sen or 0.9% to RM14.98 –- the highest on the day -- on 464,000 shares done. It was the third biggest gainer on the exchange.
"Perhaps investors are speculating that the privatisation exercise would be beneficial to HLBB, which most probably could be right," said a senior investment banker.
Analysts told theedgemalaysia.com that the parent company could be attempting to privatise its stock broking and investment banking arm, HL Cap. In a note to clients, a major investment bank said it was possible that HL Cap could be taken private, adding that it had a 'buy' call on HLBB and Hong Leong Financial Group.
HLBB is 65%-owned by Hong Leong Financial Group. The Hong Leong Group is controlled by local tycoon Tan Sri Quek Leng Chan.