Bank Muscat likely to sell entire stake in HDFC Bank

Bank Muscat is likely to sell its entire 3% stake in HDFC Bank (acquired through 14% stake in CBOP).
Officials of the Omani bank were not immediately available to comment.

"The profit on stake sale will flow through the income statements and this would give comfort to additional losses expected from investments during first quarter of 2009 in addition to providing comfort to its capital adequacy levels." Bank Muscat's profit tumbled 83 percent in the fourth quarter as the bank booked impairment losses related to an investment in Pakistan's Saudi Pak Commercial Bank. Banks across the Gulf, the world's biggest oil-exporting region, have booked provisions for bad loans and written down investments as a global financial crisis and slump in oil prices brought to an end a regional economic boom late last year. "It started yesterday," EFG-Hermes analyst Alaa El Din Moustafa said of the buying activity in Bank Muscat shares, the most-heavily traded of the day. "Everybody thinks it is about this bank (stake) sale in India, which is why the stock is moving," Moustafa said. In February 2008, Bank Muscat said it had no plans to sell any stake in HDFC after the Indian bank agreed to buy Centurion Bank of Punjab
Bank Muscat owned about 14.02 percent of Centurion Bank, according to Indian stock exchange data at the time, which it converted into between 2.5 percent and 3 percent of HDFC Bank after the agreed takeover.