Great Eastern could sell off Malaysian operations
Great Eastern Holdings is reportedly in talks with Malaysian banks relating to the sale of the insurer’s Malaysian arm, DBS Equity Research has revealed.
Aside from Great Eastern, different foreign-owned insurers working in Malaysia, resembling Prudential and Tokio Marine Insurance are reported to be exploring comparable actions.
According to the market intelligence agency, insurers are reacting to the stricter enforcement of a 70% international possession cap imposed by Bank Negara Malaysia, the nation’s central financial institution. The cap was put into place in 2009, nevertheless it was not enforced with a purpose to stimulate progress within the insurance coverage sector.
Sue Lin Lim, an analyst at DBS Equity Research, mentioned that insurers have three choices to adjust to the cap. They can listing 30% of their shares on the Malaysian inventory alternate, type a three way partnership with a Malaysian agency, or sell the 30% stake to native traders.
DBS cited Great Eastern’s mother or father firm OCBC, which mentioned that it’s “exploring options to meet the necessary requirements.”
Aside from banks, a number of Malaysian authorities funds have expressed curiosity in getting into the insurance coverage sector by way of buying stakes in foreign-owned insurers.