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KUALA LUMPUR: Public Bank shares rose in early Wednesday trading, rising to a high of RM20.10 after it proposed a historic four-for-one bonus issue to reward its shareholders and improve the trading liquidity of the shares. .
At 9.11am, it rose RM1.20 to RM19.66. 3.57 million shares were made at prices ranging from RM19.28 to RM20.10.
Public Bank supported the rise of the FBM KLCI of 8.92 points or 0.55% to 1,640.62. The turnover in Bursa Malaysia was 1.060 million shares valued at RM580.98 thousand. There were 325 winners, 291 losers, and 380 unchanged counters.
Maybank Investment Bank Research said Public Bank’s proposed bond issue is the first since 2003.
“The good news is that it reduces the bank’s share price to less than RM4, which would appeal to retail investors, while further enhancing the liquidity of an already very liquid share.
“We maintain our HOLD call and our TP of RM18.80, pegged to a FY 21 PBV of 1.5 times, backed by an ROE of 11.8%,” he said.
AmInvestment Research maintained its Hold rating on Public Bank. Its fair value remains unchanged at RM17.70 / share, linking the share to FY21 P / BV of 1.4 times, backed by an ROE of 10.7%.
“The authorization date has not yet been determined. Following the expected completion of the proposed bond issue for 1Q2021, its number of shares will increase to 19,410.7 thousand from 3,882.1 thousand.
“There will be no capitalization of reserves for the issuance of bonus shares. Total share capital will remain unchanged at RM9.4bil. Therefore, our projected ROE for fiscal year 21 remains at 10.7%, ”he said.
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