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DRB (BUY) - Affin In-Talk for Muamalat Stake

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Publish date: Fri, 17 Aug 2012, 10:44 AM
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DRB (BUY)

Affin In-Talk for Muamalat Stake

  • DRB-Hicom has received approval from Bank Negara Malaysia to commence negotiations with Affin Holdings to reduce its 70% stake in Bank Muamalat to 40%.
  • We have ascribed 1.2x P/B for Bank Muamalat, contributing to RM1.4bn or RM0.72/share (before holding company discount of 20%) to DRB.
  • DRB is likely to demand for higher valuation (vs HLIB’s) since Malaysia listed banks are traded at an average of 2.07x P/B, while Bank Islam is 1.58x.
  • Maintain Buy with unchanged Target Price RM3.43

Source: Hong Leong Investment Bank Research - 17 August 2012

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1 person likes this. Showing 1 of 1 comments

herbert456

This disposal of Bank Muamalat is not really a priority for DRBHICOM. In fact, there is always the excitement that DRBHICOM has a bank that it can cash out anytime.

Even if this negotiation fails, the keeping of 70% in bank muamalat is attractive enough to make DRBHICOM an investment choice.

2012-08-23 08:58

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