Subdued Trends

Stock Name: MAYBANK
Company Name: MALAYAN BANKING BHD

Research House: TA

Price Call: BUY

Target Price: 10.90

Maybank’s ‘hold’ stays pending capital changes

Stock Name: MAYBANK
Company Name: MALAYAN BANKING BHD

Research House: AMMB

Price Call: HOLD

Target Price: 9.80

AMResearch has kept its "hold" rating on Malayan Banking Bhd (Maybank), with a fair value of RM9.80 per share, pending changes to the bank's capital structure.

"We have earlier highlighted in our recent report that there may be changes to the banking level common equity tier 1 (CET1) ratio if Maybank is required tolocally-incorporate its operations in Singapore.

If the Singapore operations have to be incorporated, the company affirmed that it will consider it as an investment in subsidiary. This may lead to someimpact on the banking entity's CET1 ratio," AmResearch said in a report yesterday.

The firm said its sensitivity analysis shows that the banking level CET1 ratio will be at 7.92 per cent by 2018, assuming it incorporates its operations inSingapore.

"Assuming a comfortable banking CET1 ratio of 10 per cent, Maybank may possibly need to raise RM7.6 billion in fresh capital. If the need arises, we believethat Maybank is likely to consider another new share placement rather than a rights issue. This is because the company believes that its last rights issuein 2009 had led to a big decline in market capitalisation then," the research house added.

"Notwithstanding the more dilutive impact of a rights issue - which is normally priced at a larger discount versus an issuance of new shares - we prefer therights issue as it would allow all shareholders to have a fair participation in the

exercise," said AmResearch.

Maybank - Loan loss provisioning likely to be lower in 2HFY13

Stock Name: MAYBANK
Company Name: MALAYAN BANKING BHD

Research House: MIDF

Price Call: BUY

Target Price: 11.00

Corporate lending and capital market deal flow to gain momentum

Stock Name: MAYBANK
Company Name: MALAYAN BANKING BHD

Research House: MIDF

Price Call: BUY

Target Price: 11.30

Datuk Seri Abdul Wahid Omar Appointed Minister

Stock Name: MAYBANK
Company Name: MALAYAN BANKING BHD

Research House: TA

Price Call: BUY

Target Price: 12.00

Positioned to Capture Growth Across the Region

Stock Name: MAYBANK
Company Name: MALAYAN BANKING BHD

Research House: TA

Price Call: BUY

Target Price: 12.00

Growth Opportunities in Islamic Finance

Stock Name: MAYBANK
Company Name: MALAYAN BANKING BHD

Research House: TA

Price Call: BUY

Target Price: 11.30

'Overweight' call maintained on banking

Stock Name: MAYBANK
Company Name: MALAYAN BANKING BHD

Research House: KENANGA

Price Call: BUY

Target Price: 10.40

Stock Name: PBBANK
Company Name: PUBLIC BANK BHD

Research House: KENANGA

Price Call: BUY

Target Price: 15.60

Stock Name: RHBCAP
Company Name: RHB CAPITAL BHD

Research House: KENANGA

Price Call: BUY

Target Price: 8.30

Stock Name: CIMB
Company Name: CIMB GROUP HOLDINGS BERHAD

Research House: KENANGA

Price Call: BUY

Target Price: 8.20

Stock Name: AMBANK
Company Name: AMMB HOLDINGS BHD

Research House: KENANGA

Price Call: BUY

Target Price: 7.40

Stock Name: BIMB
Company Name: BIMB HOLDINGS BHD

Research House: KENANGA

Price Call: BUY

Target Price: 3.60

KUALA LUMPUR: Kenanga Research has maintained its "overweight" call on the banking sector, as it believes the local banking group will do well in the current conducive banking system with their strong balance sheets and improving earnings.

"We are seeing more evidence that the 'Responsible Lending Guidelines' by Bank Negara Malaysia is already bringing some changes to the banking industry arena," the research firm said in a note.

It expects the softer trading conditions at present to persist in the short term, and, if markets do recover, Maybank and CIMB should see the biggest recovery in their non-interest income earnings in the industry.

Kenanga Research has 'outperform' calls on Maybank with a target price (TP) of RM10.40, PBBANK (TP:RM15.60), RHBCAP (TP:RM8.30), CIMB (TP:RM8.20), AMMB (TP:RM7.40), AFFIN (TP:RM4.40) and BIMB (TP:3.60).

AFG(TP:RM4.00) and HLBANK (TP:RM15.20) are rated as 'neutral'. -- BERNAMA

9M FY12 Results Broadly Within Expectations

Stock Name: MAYBANK
Company Name: MALAYAN BANKING BHD

Research House: TA

Price Call: BUY

Target Price: 11.30

Still a sequential increase in net profit in 3QFY12

Stock Name: MAYBANK
Company Name: MALAYAN BANKING BHD

Research House: MIDF

Price Call: BUY

Target Price: 10.20

Fundamentals remain solid

Stock Name: MAYBANK
Company Name: MALAYAN BANKING BHD

Research House: MIDF

Price Call: BUY

Target Price: 10.00

Not bidding for Bank of Ayudhya, Thailand

Stock Name: MAYBANK
Company Name: MALAYAN BANKING BHD

Research House: MIDF

Price Call: BUY

Target Price: 10.00

Placement to Bolster Capital and Support Expansion

Stock Name: MAYBANK
Company Name: MALAYAN BANKING BHD

Research House: TA

Price Call: BUY

Target Price: 11.20

GWB - ASEAN's Rising Wholesale Bank

Stock Name: MAYBANK
Company Name: MALAYAN BANKING BHD

Research House: TA

Price Call: BUY

Target Price: 10.20

Malayan Banking - DRP price fixed at RM8.00 BUY

Stock Name: MAYBANK
Company Name: MALAYAN BANKING BHD

Research House: AMMB

Price Call: BUY

Target Price: 9.80

- Malayan Banking (Maybank) has announced that in relationto its proposed final GDPS of RM0.36 for FP11 and the related dividendreinvestment plan (DRP), the issue price for the new shares under the DRP hasnow been fixed at RM8.00/share. 

- Recall that the final GDPS of RM0.36 comprises anelectable portion of RM0.32 GDPS (net DPS basis is RM0.24) which can be electedto be reinvested in new ordinary shares in accordance with Maybank's DRP. 

- The remaining portion of GDPS of RM0.04 (RM0.03 net oftaxation) will be paid in cash.

- Maybank said the issue price is based on the five (5)-dayvolume weighted average market price (VWAMP) of RM8.85 per Maybank share up toand including 16 April 2012, being the last trading day prior to the pricefixing date for the issue price of new Maybank shares. 

- Thereafter, the 5-day VVAMP price of RM8.85 is adjusted bythe gross DPS of RM0.36, which leads to RM8.49 (taking RM8.85 less RM0.36).

- Subsequent to this, a discount of RM0.49 or approximately5.77% is applied to the exdividend VWAMP price of RM8.49. 

- The DRP price is slightly higher than our estimated RM7.70reflected in our earnings model currently, but the impact is minimal. 

- Thus, we consider the DRP price to be in line withexpectations.  

- We maintain Buy on Maybank with a fair value ofRM9.80/share. We believe the key rerating catalysts are:- (a) improvement inasset quality, which will provide comfort that an up-cycle in loan lossprovisioning will likely be short-lived; (b) better-than-expected ROE; (c)betterthan-expected dividend.  

Source: AmeSecurities

Maybank (Buy) - Interest in Philippines & Saudi Banks?

Stock Name: MAYBANK
Company Name: MALAYAN BANKING BHD

Research House: HLG

Price Call: BUY

Target Price: 10.12

Maybank (Buy)

Interest in Philippines & Saudi Banks?

• Dailies reported that Maybank is interested in Al-Amanah IslamicInvestment Bank of the Philippines,the country's only Islamic commercial bank and acquire additional 17.17% stakein Saudi Arabia-based Anfaal Capital for RM8.6m.
• As at Dec 2010, Al-Amanah had a book value of RM38.8m while it recordeda loss of RM2.7m for the year.
• Thus, any deal would have minor impact on financials.
• Positive about its intention to focus on Islamic banking while Al-Amanahcould (given the proper framework) could flourish and has first mover advantage.
• Meanwhile, the increase stake in Anfaal Capital would also facilitatemore cross-border activities. 
• Maintain Buy.
• Target price maintained RM10.12 based on Gordon Growth with ROE of 15.6%and WACC of 9.9%.

Source: HLIB Research - 12 April 2012

Maybank: May be bidding for Philippines Islamic Bank

Stock Name: MAYBANK
Company Name: MALAYAN BANKING BHD

Research House: ECMLIBRA

Price Call: HOLD

Target Price: 8.25

Malayan Banking Bhd (MAY MK, Hold, TP: RM8.25) said it will be keeping its options open in bidding for Al Amanah Islamic Investment Bank of the Philippines, the countries only Islamic oriented commercial bank, a Philippines newspaper reported. Al Amanah Islamic Bank is looking for a strategic partner through the sale of 49% stake or the entire bank to a foreign entity with expertise in Islamic banks. Maybank told the Philippines based newspaper that it wanted to expand further in the Asean region while strengthening its hold in the Asia Pacific region. (StarBiz)

Source: ECM Newz Bits12 April 2012

RHB Research - Banking Sector Update

Stock Name: PBBANK
Company Name: PUBLIC BANK BHD

Research House: RHB

Price Call: BUY

Target Price: 16.07

Stock Name: MAYBANK
Company Name: MALAYAN BANKING BHD

Research House: RHB

Price Call: BUY

Target Price: 10.11

Stock Name: CIMB
Company Name: CIMB GROUP HOLDINGS BERHAD

Research House: RHB

Price Call: HOLD

Target Price: 8.05

Stock Name: AMMB
Company Name: AMMB HOLDINGS BHD

Research House: RHB

Price Call: HOLD

Target Price: 6.75

Stock Name: AFFIN
Company Name: AFFIN HOLDINGS BHD

Research House: RHB

Price Call: HOLD

Target Price: 3.33

Stock Name: HLBANK
Company Name: HONG LEONG BANK BHD

Research House: RHB

Price Call: SELL

Target Price: 12.11

Stock Name: AFG
Company Name: ALLIANCE FINANCIAL GROUP BHD

Research House: RHB

Price Call: SELL

Target Price: 3.85

Sector Update

Banks ' Feb '12 system data ' Leading indicators for households improved mom                    Neutral

Sector Update

Public Bank ' Fair value at RM16.07 (from RM15.00)                                                     Outperform

Maybank ' Fair value at RM10.11 (from RM9.44)                                                           Outperform

CIMB ' Fair value at RM8.05 (from RM7.47)                                                            Market Perform

AMMB ' Fair value at RM6.75 (from RM6.23)                                                           Market Perform

Affin ' Fair value at RM3.33 (from RM3.16)                                           Market Perform (Upgraded)

HL Bank ' Fair value at RM12.11 (from RM11.18)                                                      Underperform

AFG ' Fair value at RM3.85 (from RM3.69)                                                                Underperform

MBSB ' Fair value at RM2.46 (from RM2.34)                                                           Market Perform

RCE ' Fair value at RM0.57                                                                                    Market Perform

-          Feb '12 system loan growth moderated further to +11.9% yoy but was up 0.4% mom, as compared to Jan '12 loan growth of +12.1% yoy/-0.2% mom. Loan growth for both businesses and households moderated further to 11.7% yoy and 12.1% yoy, from 11.8% yoy and 12.3% yoy respectively in Jan '12.

-          We raised our benchmark PER to 15x from 14x, which broadly lifts our fair value estimates for our coverage by 4-10%. However, our Neutral stance is unchanged with Maybank and Public Bank as our top picks for the sector.

 

Source: RHB Research - 2 April 2012

MAYBANK - Maybank expects NIM compression

Stock Name: MAYBANK
Company Name: MALAYAN BANKING BHD

Research House: HWANGDBS

Price Call: BUY

Target Price: 10.60

Maybank; Buy; RM8.80
Price Target: RM10.60; MAY MK

Maybank expects a contraction of 10 bps in the group's net interest margin (NIM) in 2012. It cited price competition between banks as the reason as new loans secured at lower pricing has narrowed NIM. This is in line with our expectation as we have imputed 10bps decline in NIM in our FY12 forecasts.

Separately, Maybank said that its exposure to the USD600m (c.RM1.8bn) unsecured funding facility on which Vietnam Shipbuilding Industry Group (Vinashin) has recently defaulted is minimal and insignificant. Maybank's total assets as at Dec-11 stood at RM451bn and it has a loan loss coverage ratio of 87%. Maybank remains our top pick among the large cap Malaysian banks. Its dividend yield is appealing at c.6%, assuming a sustainable 70% payout ratio. Apart from its improving domestic business, we believe that its long-term growth potential of its Indonesian operations remains a key re-rating catalyst. Maintain Buy and RM10.60 TP.

Source: HwangDBS Research 30 March 2012

Maybank: NIM to be compressed by another 10bps

Stock Name: MAYBANK
Company Name: MALAYAN BANKING BHD

Research House: ECMLIBRA

Price Call: HOLD

Target Price: 8.25

Malayan Banking Bhd (MAY MK, Hold, TP: RM8.25) is expecting a contraction of 10 bps in the group's net interest margin (NIM) this year. The banking group said the financial services market in Malaysia continued to be competitive, resulting in thin margins for some financing products offered due to price competition between the banks. Its president and CEO Datuk Seri Abdul Wahid Omar said the group would assess the situation from time to time, in its efforts to manage the compression of NIMs of its financial products. (Financial Daily)

Comment: Our FY12 forecasts assume a smaller 5 basis point contraction in net interest margin, but our group loan growth assumption of 9% is also lower than management's KPI of 15.2%. We are maintaining our forecasts and valuation for Maybank. (Leong Hon Sze)

Source: ECM Newz Bits 30 March 2012