It could be complying with the 70% foreign ownership cap on insurers.
Great Eastern Holdings (GEH) is reportedly engaging with Malaysian banks to explore the selling of its stake in its Malaysian operations, DBS Equity Research said.
According to a report, several other foreign insurance companies operating in Malaysia, including Prudential Malaysia and Tokio Marine Insurance Malaysia, could be exploring similar options.
The broker said it is in reaction to Bank Negara Malaysia’s (BNM) stricter enforcement of the 70% foreign ownership cap on insurers, which was issued back in 2009.
DBS analyst Sue Lin Lim said there are three ways companies can cut their stakes in their companies. They can list 30% of their shares in public, form a joint venture with a local partner, or sell to local investors.
DBS cited OCBC which said, "GEH is exploring options to meet the necessary requirements.”
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