KUALA LUMPUR, July 29 (Bernama) -- Bursa Malaysia rebounded to close higher on Wednesday on selective buying of defensive stocks after a volatile trading session. IPPFA Sdn Bhd director of investment strategy and country economist Mohd Sedek Jantan said consumer products and services stocks lifted the key index higher, overcoming lingering geopolitical concerns. At 5 pm, the FTSE Bursa Malaysia KLCI (FBM KLCI) rose 3.08 points to 1,715.56 from yesterday’s close of 1,712.48. The benchmark index, which opened 1.91 points higher at 1,714.39, moved between 1,710.79 and 1,720.59 during the day’s trading. In the broader market, gainers outstripped decliners 550 to 476, while 612 counters were unchanged, 1,129 untraded, and 48 suspended. Turnover rose to 2.96 billion units valued at RM2.48 billion from 2.94 billion units valued at RM2.56 billion on Tuesday.
Shares of Guotai Junan Securities Co and Haitong Securities Co surged after the announcement of their merger terms, which will create a state-backed brokerage with US$226 billion (RM969.99 billion) in assets. This new entity is set to compete with Wall Street firms expanding in China.
On Thursday, shares of both companies surged more than 100% in Hong Kong and by the 10% daily limit in Shanghai, as they caught up with the broader rally in Chinese and Hong Kong stocks driven by China’s recent stimulus measures.
The deal, which was suspended on Sept 6, involves a share swap, where Guotai Junan will issue shares to Haitong’s holders at a 0.62 to 1 ratio, offering a 32% premium in Hong Kong. Guotai Junan also plans to raise 10 billion yuan from its controlling shareholder to support the merger.
The combined entity will have 1.6 trillion yuan in assets, surpassing Citic Securities Co as the largest brokerage in China, with operations spanning Hong Kong, Singapore, New York, London, Tokyo, and Mumbai. Upon completion, Haitong will be delisted from Shanghai and Hong Kong.
The merger follows Chinese President Xi Jinping’s call to develop top investment banks to compete globally and is expected to accelerate further consolidation in the sector. The deal is pending shareholder and regulatory approvals, with UBS Group AG advising Guotai Junan and DBS Group Holdings Ltd advising Haitong.
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