Flat open expected for the STI; DBS likely to be in focus

Is Indonesia’s central bank moving to block DBS from taking over Danamon?

IG Markets Singapore said:

On the local market DBS is likely to be in focus today after rumours that Indonesia’s central bank will cap bank ownership at under 50%. Many see this as a move to block DBS from taking over Danamon and future foreign banks from taking big stakes in Indonesian banks.

CEO Piyush Gupta had been under fire for the planned takeover of the Indonesian bank but shareholders were warming up to the bid. Ironically, he could have the perfect opportunity to walk away from the deal without any shame if Indonesia pushes ahead with the ownership cap.

The futures market is pointing to a fairly flat open for the STI this morning. Japanese equities have opened firmer this morning after its inflation data came in at 0.2% for April.