May 14, 2012

Kenanga raises MBSB's target price

Stock Name: MBSB
Company Name: MALAYSIA BUILDING SOCIETY BHD
Research House: KENANGAPrice Call: BUYTarget Price: 2.70



Kenanga Research lifted Malaysia Building Society Bhd's (MBSB) target price to RM2.70 per share despite the lender's first quarter earnings result came in marginally below expectations.

"The stock's valuation still looks undemanding at 5.9 times price-to-earnings ratio post adjustment, against its banking peers of 13.0 times," the broker said in a research note on Monday.

Maintaining "outperform" on the stock, Kenanga said MBSB offered potential capital upside of 21 percent, with an additional dividend yield of 2.5 percent, bringing the potential total return to 23 percent over the next 12 months.

"Its return on equity of 28.1 percent remains one of the highest for financial stocks," it added.

By 10.25am, MBSB's shares dropped 1.33 percent to RM2.23 per share, underperforming the Malaysia's benchmark stock index that shed 0.19 percent. -- Reuters

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