CIMB Thai Bank: Stock Rally Can't Be Explained by Any Corporate Development

   By Phisanu Phromchanya 
 

BANGKOK--CIMB Thai Bank PCL (CIMBT.TH), a local unit of Malaysia's CIMB Group Holdings Bhd. (1023.KU), said Tuesday that a rally of its share price on Monday can't be explained by any material corporate developments at the bank.

The Stock Exchange of Thailand on Monday placed a trading alert on the bank's stock and sought clarification from the bank after its share prices and trading volumes moved dramatically: The stock surged 16.7% to 2.80 baht ($0.09) on Monday, with active trading value of 949.8 million baht ($31 million) compared with an average daily trading value of 61.2 million baht in September.

The Kaohoon newspaper reported Monday, citing an unnamed source, that CIMB Group is set to acquire General Electric Co.'s (GE) 25% stake in Thailand's Bank of Ayudhya PCL (BAY.TH). It said CIMB is negotiating the price and that the Malaysian bank plans to merge CIMB Thai with its bigger rival Bank of Ayudhya, Thailand's fifth-largest lender by assets.

CIMB Thai Bank and Bank of Ayudhya declined to comment on the report.

A GE Capital spokesman said Monday that the company doesn't comment on market speculation, but it continues to review the strategic options for its remaining interest in Bank of Ayudhya.

Write to Phisanu Phromchanya at [e-mail]

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