Tuesday, June 21, 2011

MAA shares fall to lowest since March

KUALA LUMPUR: Shares of MAA HOLDINGS BHD [] fell to the lowest since March 18 this year as investors were unhappy over the sale of its insurance business for RM344 million cash.

MAA was the top loser and at 3.18pm, it was down 28 sen to 75 sen. Turnover was 67.99 million shares valued at RM917.51 million. The broader market was becoming increasingly cautious, with declining stocks beating advancers 503 to 187 while 286 stocks were unchanged.

MAA appeared to have sold its insurance business cheap for RM344 million cash, valuing its assets at barely 1.36 times book value which is considerably lower than the recent transactions in the industry.

The slew of divestments by''local insurers, including JERNEH ASIA BHD [] and PACIFICMAS BHD [], changed hands at above 1.6 times book value.

Berjaya Corp Bhd's (BCorp) disposal of a 40% stake in Berjaya Sompo Insurance Bhd to its Japanese stakeholder, Sompo Japan Asia Holdings Pte Ltd, seems to have set a new benchmark pricing for general insurers at above three times book value.

On Monday, MAA said its unit MAA Corp Sdn Bhd had signed a conditional sale and purchase agreement with Zurich Insurance Co Ltd in relation to the proposed disposal.

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