Posted by SharehlderOppression > 2023-11-28 11:56 | Report Abuse

If you buy RHB because of its dividends, you should be contented because RHB still maintains its dividend. You've achieved your objective.

But if you buy RHB because you expect its dividend yield will help attract more investors, thereby pushing up share price so that you may exit with a handsome capital gain, well, it has not worked out that way, not yet. Such an expectation means you depend on the market to come to your view. However currently the market doesn't just look at dividends, but also factors like growth, asset quality and others.

Observatory made the best point.

Posted by prudentinvestor > 2023-11-29 22:02 | Report Abuse

EPF is the second largest shareholder of GLC such as MAH, IHH and MISC with a 13% shareholding in MAH, 12% in MISC and just under 10% in IHH. MISC is trading at a PE of above 15 and a dividend yield I believe of under 5%. For years IHH trades at a PE of over 30 and a yield of around 2%. MAH lost a total of about RM1.8 billion in 2020 and 2021. Yet both MAH and MISC are trading at above RM7 a share while IHH is above RM5.80. Non has earnings and dividend yields comparable to RHB Bank but EPF is just unwilling to support RHB to a price that RHB Bank deserves.

Posted by prudentinvestor > 2023-11-30 16:52 | Report Abuse

There is still quite a lot of selling pressure which I believe is from institutions. Small investors should not take their cue from them.

Posted by prudentinvestor > 2023-12-03 16:28 | Report Abuse

When RHB Bank reported much improved quarterly earnings for the first and second quarters, its share price hardly moved up. When it reported slightly poorer results for the third quarter, its share price immediately dropped. There is really no logic. For much of this year, it was 30 to 50 sen higher than CIMB bank but now it is 30 sen lower.

Posted by observatory > 2023-12-03 23:13 | Report Abuse

The market is not just looking at last quarter earning or current dividend yield. It is also responding to some negative developments. Among others:

1. Loan loss coverage (LLC) has declined from 109% (1Q23), to 83% (2Q23), to the latest 75% (3Q23), lower than pre-pandemic level
2. Management has guided higher cost income ratio at 47%-47.5%, from 44.6% previously
3. Management has guided lower ROE at 10%, from 11% previously.

Posted by prudentinvestor > 2023-12-05 12:39 | Report Abuse

You only look at the negative aspects of RHB Bank. The views of some IBs are more balanced. Ignoring the IBs with the highest and lowest TPs, CIMB and AmInvest still have buy calls on RHB with a commendable TP of around RM6.50 a share.

Posted by observatory > 2023-12-05 19:56 | Report Abuse

Yes, I only picked up the negative aspects because I tried to explain why the market might not be giving RHB a higher price despite the earning and dividends you mentioned

Posted by observatory > 2023-12-05 19:56 | Report Abuse

If you believe in the collective wisdom of analysts, this is the latest concensus for the six large and mid size banks.
Maybank, 8 buy/ 11 hold/ 2 sell, consensus TP RM9.38, upside 4%
Public Bank, 14 buy/ 5 hold/ 2 sell, consensus TP RM4.73, upside 11%
CIMB, 16 buy/ 3 hold/ 0 sell, consensus TP RM6.31, upside 10%
Hong Leong Bank, 14 buy/ 1 hold/ 1 sell, consensus TP RM22.50, upside 17%
RHB, 6 buy/ 8 hold/ 3 sell, consensus TP RM6.08, upside 11%
AM Bank, 12 buy/ 3 hold/ 0 sell, consensus TP RM4.37, upside 8%

Posted by observatory > 2023-12-05 19:58 | Report Abuse

Dividend seekers choose Maybank and RHB. For asset quality, Public Bank and Hong Leong Bank. For growth, Hong Leong Bank. For those who are not sure, just take a small position in each bank when valuation isn't demanding.

Posted by prudentinvestor > 2023-12-07 17:00 | Report Abuse

After dropping to a low of RM5.42 on Monday, it has staged a mild recovery. Hopefully the worst is over and the recovery process would last until end of the month. Cheers!

Posted by observatory > 2023-12-07 21:27 | Report Abuse

For long term investors, just enjoy the dividend and don't be overly concerned about share price. If management is capable and company fundamentals are good, it will show in future results and share price shall follow. Time will tell.

Posted by prudentinvestor > 2023-12-08 16:31 | Report Abuse

RHB Bank is still struggling at its pre pandemic levels. Maybank is already at least 5% higher, CIMB bank is over 10% higher while Public Bank is over 20% higher.

Posted by observatory > 2023-12-08 17:51 | Report Abuse

The dividend adjusted return over the period of
(1) 10 years
Hong Leong Bank 85%
Maybank 75%
Public Bank 64%
CIMB 10%
RHB 9%

(2) 5 years
RHB 38%
Maybank 35%
CIMB 24%
Hong Leong Bank 6%
Public Bank 2%

(3) 3 year basis
CIMB 48%
Maybank 28%
RHB 21%
Public Bank 10%
Hong Leong Bank 10%

(4) 1 year basis
Maybank 12%
CIMB 8%
RHB 3%
Public Bank 0%
Hong Leong Bank -3%

Posted by observatory > 2023-12-08 17:51 | Report Abuse

It's difficult to predict winners, especially on a short term basis

Posted by prudentinvestor > 2023-12-11 12:32 | Report Abuse

Bought some RHB Bank shares over the past year at an average price of over RM5.50 a share. Ignoring the dividends, still suffer small losses.

Posted by derricksyl > 2023-12-13 15:35 | Report Abuse

The next div will be 25 sen .....

Posted by prudentinvestor > 2023-12-14 16:46 | Report Abuse

RHB Bank is getting very boring now. Many bank counters including Maybank, Public Bank and CIMB Bank have gone up but RHB Bank is still struggling at around RM5.50. It hasn't traded above RM5.70 for over half a year now.

Posted by GT8989 > 2023-12-18 11:01 | Report Abuse

Unless EPF stop disposing RHB...otherwise its hard for the share price to go up..

Posted by prudentinvestor > 2023-12-18 12:29 | Report Abuse

Actually EPF's shareholdings in RHB Bank increased by 9,485,900 shares from 12 June 2023 to 12 December 2023, ie from 1,757,106,020 shares to 1,766,591,920 shares. It appears unwilling to support RHB Bank shares at a more reasonable level.

Posted by stockraider > 2023-12-19 12:38 | Report Abuse

Good bank exposure loh!

Posted by prudentinvestor > 2023-12-20 10:30 | Report Abuse

For most part of the past 4 years, RHB Bank's share price was always 20 to 30 sen higher than CIMB. While CIMB Bank dipped below RM3 sometime in late Oct/early Nov 2020, RHB Bank stayed at above RM4.20. Since surpassing RHB Bank's share price several months ago, CIMB Bank's lead has widened to over 40 sen. This is really heart wrenching!

Posted by prudentinvestor > 2023-12-20 11:55 | Report Abuse

CIMB Bank should rise above RM6 within the next few days while RHB Bank is still struggling at around RM5.50. What is EPF doing man?

Posted by observatory > 2023-12-21 08:04 | Report Abuse

Why should EPF support the share price? What are the benefits for EPF and EPF contributors in maintaining a high share price level, only for other investors/ speculators to take advantage by dumping their shares to EPF?

Posted by troy88 > 2023-12-21 09:36 | Report Abuse

EPF is the pump and dump king of bursa. Never put too high hopes on them..

Posted by prudentinvestor > 2023-12-21 10:04 | Report Abuse

Malaysia Airports Holdings lost a total of over RM1.8 billion in 2020 and 2021, has inconsistent earnings and low dividend yield, yet major shareholders are willing to support its share price. Any good reason?

Posted by observatory > 2023-12-21 17:48 | Report Abuse

Under normal circumstances, what could major shareholders gain from providing price support?
You may look at the historical loss suffered by Airport during the pandemic period. But they may well be looking at the future prospects of post Covid recovery and favourable government actions.
For the same reason, these managers also look beyond the historical profits and dividends of RHB.
Interpreting their actions from the framework of price support is misleading.

Posted by prudentinvestor > 2023-12-22 08:54 | Report Abuse

I have looked through MAH's profit and loss records for the past 20 years. It was profitable from 2003 to 2014, with highest eps achieved in 2014 at 55.42 sen and lowest eps in 2003 at 7.7 sen, for an average eps of 26.87 sen during this period. Discounting abnormalities in earnings during the pandemic period, its earnings from 2015 to 2022 have been even more disappointing, with highest eps at 40.37 achieved in 2018 and lowest eps at -1.69 in 2015. With so little earnings, one can't expect it to pay much dividend. I assume its yield should not exceed 2.5%. It hasn't performed well over the past 20 years, I don't expect it to do better in the next 20 years.

Posted by invest8912 > 2023-12-22 16:28 | Report Abuse

Don't understand why so cheap. Top up RM5.40-RM5.43

Posted by troy88 > 2023-12-22 16:34 | Report Abuse

Oversold for no reason. Will makan some if drop more..

Posted by observatory > 2023-12-22 21:27 | Report Abuse

It's possible that Airport major shareholders make mistakes. But for whatever reasons that they accumulate Airport shares, I'm quite sure it's not for the purpose of price support or charity to minority shareholders.
Beside it's difficult to compare RHB with Airport as they are in different industries with different competitive landscapes.
Better to compare RHB with other banks. Why is RHB a better buy than say Maybank, Public Bank, Hong Leong Bank, and Ambank?

Posted by aklobi > 2023-12-26 13:33 | Report Abuse

I started buying with every drop in price.

Posted by prudentinvestor > 2023-12-26 15:22 | Report Abuse

For other bank counters, when volume goes up, price will generally go up. For RHB Bank, it is different. Its share price drops when turnover goes up.

Posted by papakuching > 2023-12-26 16:57 | Report Abuse

RM5.40 is a good buy. Accumulate

Posted by observatory > 2023-12-26 17:57 | Report Abuse

Not just RHB but other bank stocks also experienced selling pressure lately. As for EPF, despite lots of activities, its shareholding is maintained around 41% , +/- 1%. Long term shareholders could simply ignore EPF actions.

Posted by prudentinvestor > 2023-12-27 16:59 | Report Abuse

Very disappointing performance this year. Very near to its 52 week low of RM5.29.

Posted by prudentinvestor > 2023-12-28 09:09 | Report Abuse

Those who wish to buy RHB Bank as a long term investment better act fast.

Posted by ultranippon18 > 2023-12-28 10:28 | Report Abuse

wow, just as eveyoen feeling dissapoint with rhb, this morning rebound back.

Posted by prudentinvestor > 2023-12-28 12:07 | Report Abuse

CIMB Bank is already more than 20% higher than its 52 week low, Public Bank is over 13% higher while Maybank is over 9% higher. RHB Bank is only 3% higher. RHB Bank is a laggard now.

Posted by yfchong > 2023-12-28 13:46 | Report Abuse

After 2024 new year can parking yeah

Posted by aklobi > 2023-12-29 01:03 | Report Abuse

Already bought 3 times with average price 5.40. Was hoping to buy more at lower prices but RHB shot up. Will wait and see .

Posted by prudentinvestor > 2023-12-29 11:58 | Report Abuse

Yea, pick up blue chip bank stocks whenever an opportunity arises. That is the right way to invest.

Posted by prudentinvestor > 2023-12-29 20:55 | Report Abuse

EPF needs to replenish the heavy withdrawals by its members over the past two years. Hence RHB Bank would likely maintain or even increase slightly its total dividend payment.

Posted by aklobi > 2023-12-29 21:33 | Report Abuse

Happy New Year to All.

Posted by unicornbird > 2023-12-30 09:15 | Report Abuse

obs, is this a serious concern?
Loan loss coverage (LLC) has declined from 109% (1Q23), to 83% (2Q23), to the latest 75% (3Q23), lower than pre-pandemic level

Posted by unicornbird > 2023-12-30 09:17 | Report Abuse

if the market condition improves, is it ok for bank to set aside less to cover for defaults?

Posted by observatory > 2023-12-30 16:22 | Report Abuse

RHB management said they were comfortable with lower LLC because their problematic loans are well collagenized.
However, there are only two banks where LLC as of 3Q23 is lower than the pre-pandemic 4Q19. For RHB it's 75% vs 86%. The other is BIMB which is 127% vs 174%.
Public Bank, for example, has increased to 187% from 124%.

All is relative. Assuming RHB management is right, and the economy continues to improve, RHB will not need to do extra provision. Profits will not be hit.
Meanwhile other well provisioned banks will have the option to write back their earlier provision, giving their profits extra boosts. This option is no not available to RHB.

Anyway, there are many factors to consider besides LLC and dividend yields. It's unclear to me which banks will outperform. The simpler approach is to distribute the bets.

Posted by unicornbird > 2023-12-30 17:46 | Report Abuse

Thanks obs, i see the problem now. RHB has less provision for bad debt, results in higher quarterly earning.
so they may not be doing so well as reported, is that correct?

Posted by unicornbird > 2023-12-30 18:01 | Report Abuse

but if a bank set over 100% LLC, isn't it redundant?
because not all loans will default.

so RHB's 75% sounds reasonable & quite conservative.
it has enough funds to cover loss if 75% of it's loan go bad. That's a huge amount

Posted by observatory > 2023-12-30 23:48 | Report Abuse

The LLC mentioned here excludes regulatory reserve. Otherwise it would be even higher.
Besides, since RHB management claimed their loans are well collateralized, they don't need so much provision.
However, bad loans are not static figures. When economy turns sour, it could rise fast, and the coverage ratio will drop. Heavy provisions will be needed which hit earnings. Maybe this is why some other banks are prudent by maintaining their LLC at high level.
But this is just one of the many variables. Among local banks RHB has the highest CET-1 ratio.
Honestly I find it hard to understand banks' earnings. They have many levers to adjust and smooth their earnings through provision, write back and so on. Unless one can understand how the different pieces work together, otherwise it's hard to compare the profitability of one bank with another over a short term basis.

Posted by unicornbird > 2023-12-31 17:14 | Report Abuse

obs, is there another metrics that measure total provision / total loan?
this way, we can compare how well each bank cover their potential losses

else, one can look good by picking very little bad debt. then make the LLC look very good
eg, by lowering potential bad debt to $1m, $3m provision is enough to have 300% LLC