Maybank's shares slump after rights issue news

The $1.6 billion offering will be the second largest bank equity deal in Asia this year after DBS's rights issue and will come at a similar discount.

Investors reacted negatively to the M$6 billion $1.6 billion rights issue announced by Malayan Banking, or Maybank, after the close on Friday, pushing its share price as much as 6.3% lower shortly before the end of Kuala Lumpur trading yesterday. In the final minutes of the session, however, a spurt of buying saw the stock recover to a close at M$4.96 -- down a more modest 2.75% on the day.

The renounceable rights issue had been well-flagged in the local media and on the wires, and thus the sell-off was most likely not due to the pending dilution, which could be as much as 45%. The Malaysian lender's earnings report for the six months to...

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