Acquisition of MCB shares by Maybank: Balance of payments, reserves to rise $217m

KARACHI - The expected acquisition of MCB Bank's shares by Malayan Banking Berhad (Maybank) may add $217 million to the country’s deteriorating balance of payments and foreign exchange reserves.

The likely sale transaction of the said bank’s 5 per cent further stake which is due for completion in the coming month as part of the share purchase agreement signed between Maybank and sponsors of MCB in May 2008, could provide a minimum inflow of US$217 million to the financial and capital account surplus, said research analyst.

If the deal is executed at the capped amount of Rs 510 per share, the financial account would rise to $226mn while, if the stake is sold at Rs 490 per share, the transaction could provide the financial account with a minimum of $ 217mn, financial analyst of JS Research Farhan Rizvi said, adding that as the economy is going through a difficult phase due to surging import bill on account of soaring food and oil prices, it is anticipated that this acquisition would support government in stabilizing Pak rupee.