AmInvestment Bank’s share performance reviews
RHB Bank:
We continue to like the stock due to an undemanding valuation, trading at 0.8x to FY19 BV/share. Also, the group’s asset quality is improving with provisions declining.
Public Bank: Strong asset quality and high level of regulatory reserves of RM2.0bil provide a strong loan loss cover of 261.0%.
Alliance Bank:
We expect earnings to improve in FY19 with a stronger revenue leveraging the group’s transformation initiatives. Also, the improved earnings of the group will be supported by a decline in OPEX due to lower investment expenses for transformation and cost savings realized from the completed MSS/VSS and branch consolidation.
BIMB Holdings:
Consistent earnings of the group, stronger profits ahead for insurance business under its subsidiary, Syarikat Takaful (STMB) coming from its tie-ups with banks for bancatakaful, surplus funds position and healthy claims ratio of STMB as well as decent ROEs of 12%–13% are expected in FY18-19.
CIMB:
Attractive valuation, trading at 1.0x our FY19 BV/share with the share price weakness. The group’s CI ratio is gradually improving with the disposal of its 50% stake in CSI while its capital ratio will gradually be strengthened with the disposal of its stakes in CSI and CIMB-Principal Asset Management. Asset quality of the group is gradually improving with a decline in provisions.
Maybank:
Valuation has turned attractive after the recent heavy selldown of the stock, diversified earnings and higher dividend yields compared to peers. Potentially, the cash portion of its dividends is likely to be higher compared to the portion that is electable for the reinvestments under the DRP. This is due to the gradual improvement in risk weighted assets despite the group’s expansion in assets.