Discuss about the issue of merger plan between RHB, CIMB and MBSB based on

investor relation perspective.

The merger deal between Malaysia's CIMB Group, RHB Capital Bhd and
Malaysia Building Society Bhd (MBSB) had been agreed by those companies on 8 th
October 2014. This merger deal will make them to create the country's biggest banking
group. Besides that, this deal will involve a share swap between Malaysia's secondbiggest lender CIMB and its fourth-largest bank RHB. In this reaction paper, I will
discuss the issue of merger plan between RHB, CIMB and MBSB based on perspective
of investor relation.
First, lets discuss about the investor relation. Investor relations are the term used
to describe the ongoing activity of companies communicating with the investment
community. While the communication those companies undertake is a mix of regulatory
and voluntary activities, investor relations is essentially the part of stock market life that
sees companies interacting with existing shareholders, potential investors, analysts and
journalists. The commonality however, is that each of the communication tools that
companies utilize are designed to inform stakeholders about the company, so that they
can gain a greater understanding about the companys business, its governance, financial
performance and prospects. So, its show that investor relation is important for those
companies (CIMB, RHB and MBSB) to build a strong and good relation to the
investment community.
In my opinion, those companies should build a merger communication planning.
Its because merger communication planning is an essential element of an Investor

Relations program. Investor relations pros need to be proactive, from monitoring merger
developments in their industry sector to responding to investor queries about potential
deals. A potential merger highlights the need for an integrated approach to
communication, given the range of audiences (investor) interested in the news and
potential impact. Investors want to know how the combined firm will generate higher
returns on their investment. If those companies that can clearly articulate what a merger
will mean to all their constituents will have the edge and build the good image and
reputation. Besides that, market feedback also needs to evaluate to clear about investor
opinion. Those company can know that their current investor or potential investor either
support their merger or not.
In short, investor relation is concerned with nurturing the relations to the
companys investors and their advisors. It is needed to those companies explaining their
business to the investment community as it is about companies listening to the views and
feedback from that very group especially after the big changer like merger in those
companies. Its help the capital market to understand the value creation potential of the
company. Lastly, in the efforts to prepare the good story about the company, the sales and
marketing departments may for example also be involved. As the IR work is perceived as
a balance between the softer field of communication and the harder financial figures, the
filling in of the role may necessarily involve finding a balance between consistent and
honest information without overselling.

Reference:
Clarke, G. and Murray, L.W. (2000). Investor relations: perceptions of the annual
statement. Corporate Communications: An International Journal.
Dolphin, R.R. (2004). The strategic role of
Communications: An International Journal.

investor

relations.

Corporate

Holland, J.B. (1997). Corporate Communications to Institutional Shareholders. ICAS

Research Report, Edinburgh.