Singapore-based DBS Bank has announced a 'conclusive' capital-raising share placement to allay investor concerns of further profit-sapping issues to help pay for its takeover of Hong Kong's Dao Heng Bank in April this year.
However, the timing of the placement - and the discount at which it was made - risks having the reverse effect on the market, warn some analysts.
Unveiling a novel capital-raising placement yesterday, underwritten by Deutsche Bank, that will raise US$2.1 billion in fresh equity, DBS president and chief operating officer Jackson Tai said the exercise was 'conclusive'. About half the issue, or US$1.15 billion, already had been purchased by two major US shareholders in DBS - Brandes, and investment companies in the Capital Group International.
Both obtained the approval of the banking watchdog, the Monetary Authority of Singapore, to move beyond the 5 per cent threshold for single investors.
The same relaxation would be extended to other banks which chose the route, Mr Tai said.
Voting rights on the shares would be exercised only according to the recommendation of 'independent proxy voting advisers', added DBS.
