Kenanga Research raised its target price on the country's
largest bank Malayan Banking Berhad to 10.90 ringgit
per share from 10.40 ringgit on the back of strong earnings in
Maybank, Southeast Asia's fourth-biggest lender by assets,
on Thursday reported its October-December quarterly profit rose
16 percent to 1.46 billion ringgit, bolstered by higher net
loans, advances and fee income.
But Maybank's unexciting loan growth of only 12.9 percent
y/y in the fourth quarter was due to slower loan demand in
Singapore and tighter markets in the region, Kenanga said in a
note on Friday.
Kenanga added that the bank's issuance of 415 million new
shares in October last year, which raised 3.7 billion ringgit,
signalled that Malaysian banks are feeling the regulatory
pressure to boost their capitals as they expand regionally.
"We think Maybank's equity issuance was a positive move that
removes a dilution overhang that still remained in place for its
government-linked company peers, CIMB Group," Kenanga
Kenanga kept its 'outperform' rating on the stock.
Maybank's shares rose 0.67 percent. The Malaysian benchmark
stock index crept up 0.04 percent.
0945 (0145 GMT)
(Reporting by Anuradha Raghu;Editing by Gopakumar Warrier;
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