May 25, 2011

RHBCAP - RHBCap a 'buy', say research houses

Stock Name: RHBCAP
Company Name: RHB CAPITAL BHD
Research House: OSK

Several research houses have maintained their "buy" call on RHB Capital Bhd.

OSK Research said the group's near term operational outlook remained intact and the stock's valuation remained relatively attractive.

"Following a slight two per cent upward adjustment to our book value following the completion of the group's dividend re-investment scheme, which saw an impressive 84 per cent take-up rate and a downward adjustment to cost of equity from 9.5 per cent to 9.2 per cent, we derive a higher fair value of
RM10.16 against RM9.56 previously," the research house said in its Malaysia Equity Investment Research Daily.

Meanwhile, HwangDBS Vickers Research set its target price at RM10.00, assuming five per cent long term growth, 10.5 per cent cost of equity and 16 per cent return on equity.

"Newsflow on the bidder for Abu Dhabi Commercial Bank's 25 per cent stake in RHB Capital is a near-term catalyst for the stock.

"We reiterate our merger and acquisition stance for RHB Capital whcih is angled towards a value-enhancing acquirer," the research house said in its Company Focus. -- Bernama

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