Newz Bits 310112

Highlights of the day

§         Malayan Banking (Company Update): A mathematical analysis of its Dividend Reinvestment Plan (Maintain HOLD, TP: RM7.80) [download report]

Our mathematical analysis of Maybank’s dividend reinvestment plan (DRP) shows that with 90% of shareholders opting to reinvest their dividends, the beneficiaries are actually the shareholders who choose to receive their dividends in cash.  Their dividend yield remains an attractive 5.9% p.a. and the growth potential of their shareholding improves from 3.8% to 6.9% p.a. thanks to the reinvestment from the other 90% of shareholders.  We are reducing our target price for Maybank from RM8.00 to RM7.80 due to EPS dilution from its DRP, and lowering our net dividend yield forecast from 6.1% to 4.0% p.a. which is a truer reflection.  HOLD maintained.

§         Public Bank (4QFY11 Results): In line with consensus (Maintain HOLD, TP: RM13.00) [download report]

FY11 results were within market expectations, with EPS growth of 14% on the back of a 10% growth in operating profit and a drop in provisions.  Loan and deposit growth of 13-14% offset lower net interest margins, and Public Bank is still targeting similar growth rates in 2012. However, its FY11 dividend payout ratio of 48% was lower than FY10’s 52%. We have reduced our EPS forecasts marginally by 1-3%. Although we have raised our target price to RM13.00 per share, we are maintaining a HOLD as total expected return is zero.

Other reports

§         Newz Bits [download report]

Other Malaysian news

§         Tenaga: Che Khalib quits TNB

§         AirAsia: Flew 30m passengers in 2011

§         MAHB: Proposes private placement of up to 110m shares

§         DRB-Hicom: In Volkswagen charm offensive

§         Proton: New management team likely following takeover

§         E&O: SC committee shot down general offer

§         Tebrau Teguh: KPRJ to launch GO on Tebrau Teguh

§         Ekovest: In share swap deal with Wira Kristal

§         Temasek Formation: Gets nod for merger

§         Economy: Government to sell RM90bn worth of bonds

§         Economy: More liberalisation measures from BNM

§         Plantation: Delay in CPO quotas

Global news

§         US: Consumer spending stalls as Americans lift savings

§         US: Fed says business-loan demand climbs as economy accelerates

§         Europe: Leaders agree rescue fund, 25 join fiscal pact

§         Europe: Confidence increases less than estimated

§         South Korea: Industrial output rises slower at 2.8% y-o-y

Visit ECM Libra at https://www.ecmlibra.com/ecmlsmy

Our on-line trading portal at www.ecmmoney.com