STOCKS NEWS MALAYSIA-Affin cuts Hong Leong to reduce
Affin Investment Bank downgraded Hong Leong Bank Bhd to 'reduce' from 'add', after the shares of the company exceeded the brokerage's target price of 14 ringgit.
Hong Leong shares fell 0.83 percent to 14.42 ringgit on Friday, against the broader index's decline of 0.17 percent. Affin said the stock was trading at "lofty" valuations.
The company posted a 19.5 percent jump in first-quarter profit on Wednesday, driven by strong loan growth and income growth from its Islamic banking operations.
"Dividends will not be as enticing, as capital reinvestment appears to be a key strategic thrust in order to position the company for potential expansion opportunities or to buffer it against an economic downturn," said Affin in a report on Friday.
0916 (0116GMT) (Reporting by Al-Zaquan Amer Hamzah in Kuala Lumpur; Editing by Anand Basu; email@example.com)