News that Bank Indonesia will make exceptions for higher ownership levels in local banks will reflect positively on the share prices of Maybank and CIMB.
Banks in great strong financial shape, such as having Tier 1 capital above 6.0 percent,will exempt them from the new rules.
The exemptions follow the widely-expected ruling by Indonesia's central bank on single ownership limit for local banks at a maximum 40 percent, but this is only for new acquisitions, OSK Investment Banking said in an investment research note.
Existing banks would be exempted if they meet Bank Indonesia's minimum corporate governance and financial health thresholds.
As such, it appears that this new ruling may not be retroactive and provide rational exceptions to the rule if existing banks meet the stipulated exceptions set by BI.
Maybank traded one sen higher at RM8.78 on Bursa Malaysia as at 12.30 pm while CIMB eased two sen to RM7.88.
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