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.
(Reporting by Al-Zaquan Amer Hamzah in Kuala Lumpur; Editing by
Anand Basu; firstname.lastname@example.org)