Bank Muscat sells 40% of its stake in HDFC Bank
Muscat: Bank Muscat said on Tuesday it had sold 40% of its 3% stake in HDFC Bank and would offload the rest over time as its seeks cash to cover losses from equity investments. Shares in Oman’s largest lender fell more than 7% after it said it expected to report between 4 and 7 million riyals ($10.39-$18.19 million) of losses from its “available for sale” equities portfolio in the first quarter. Banks across the Gulf, the world’s biggest oil-exporting region, have booked provisions for bad loans and written down investments as a global financial crisis and slump in oil prices brought to an end a regional economic boom late last year. An almost $100-a-barrel slump in oil prices since last July has dimmed the region’s growth prospects and forced many banks to rethink expansion plans as they focus on carrying their own countries through the crisis. “We decided to sell our stake in HDFC Bank over a period of time,” Bank Muscat said in a statement on the bourse website, without giving a reason. It said the price and time frame of its stake sale depended on market conditions. “(To) date the bank has disposed 40% approximately of its stake,” it said. Shares of Bank Muscat slumped 7.38% after a twoday rally of more than 17%, driven mainly by speculation it would sell its almost 3% stake in HDFC, giving it cash to cover bad loans. “It’s the old ‘buy on rumour, sell on fact’,” said Sunil Dhall, a vice-president at Muscat-based Gulf Baader Capital Markets. “The loss is lower than the market was expecting, so it is positive news and Bank Muscat shares could rise to 0.55 riyal in the coming three days.” The stock last traded at 0.501 riyal. Dhall added that the bank might need to speed up its sale of HDFC shares now that its intention was public. In India, HDFC shares fell 2.27%. According to estimates on Monday, Bank Muscat would make about $185 million by selling a 2.67% stake in HDFC at Friday’s closing price. Bank Muscat’s profit tumbled 83% in the fourth quarter as the bank booked impairment losses related to an investment in Pakistan’s Saudi Pak Commercial Bank. “During the course of the year the bank will have to repeat the impairment test exercise it carried out last year for testing any potential impairment in value on its Saudi Pak Bank investment,” Bank Muscat said. REUTERS --~--~---------~--~----~------------~-------~--~----~ You received this message because you are subscribed to the Google Groups ""GLOBAL SPECULATORS"" group. To post to this group, send email to [email protected] To unsubscribe from this group, send email to [email protected] For more options, visit this group at http://groups.google.com/group/globalspeculators?hl=en -~----------~----~----~----~------~----~------~--~---
