Danamon Jumps Most in 20 Months on DBS Speculation

PT Bank Danamon Indonesia rose the most in 20 months in Jakarta trading amid speculation DBS Group Holdings Ltd. will buy a stake in the Indonesian lender, according to Teguh Hartanto, an analyst at PT Bahana Securities. 

Danamon, owned by Singapore’s Temasek Holdings Pte and Deutsche Bank AG, surged 11 percent to 5,950 rupiah at the 4 p.m. Jakarta time close, the steepest increase since May 19, 2009. The Jakarta Composite index gained 0.4 percent. 

“Talks about an investor looking to buy a company prompt the market to assume that the company must be doing well,” Andrew Siahaan, an analyst at PT Reliance Securities in Jakarta, said. Furthermore “a new investor may provide Danamon with fresh funds that it could use to expand lending.” 

So far there’s no plan for a change in the bank’s ownership, Vera Eve Lim, finance director at Jakarta-based Danamon, said in a mobile-phone text message. Temasek said in a statement it declined to comment. 

DBS “aims to have a more diversified geographic reach over time,” Edna Koh, a DBS spokeswoman in Singapore, said in an e- mailed statement. “We will build this out through organic growth, and are not averse to inorganic expansion. However, these opportunities will depend very much on strategic fit, pricing, and market dynamics. Any scenarios linking us to specific names are purely hypothetical, and we are not in discussions on acquisitions at this time.” 

Temasek owns 27 percent of DBS, Southeast Asia’s biggest bank by assets, according to data compiled by Bloomberg. 

Danamon is trading at 12.8 times estimated earnings, below the average multiple of 14 of shares on the Jakarta Composite index. The stock has risen 22 percent over the past year compared with a 34 percent gain on the benchmark stock index. Source: Bloomberg