- Malayan Banking (Maybank) has announced that in relation
to its proposed final GDPS of RM0.36 for FP11 and the related dividend
reinvestment plan (DRP), the issue price for the new shares under the DRP has
now been fixed at RM8.00/share.
- Recall that the final GDPS of RM0.36 comprises an
electable portion of RM0.32 GDPS (net DPS basis is RM0.24) which can be elected
to be reinvested in new ordinary shares in accordance with Maybank’s DRP.
- The remaining portion of GDPS of RM0.04 (RM0.03 net of
taxation) will be paid in cash.
- Maybank said the issue price is based on the five (5)-day
volume weighted average market price (VWAMP) of RM8.85 per Maybank share up to
and including 16 April 2012, being the last trading day prior to the price
fixing date for the issue price of new Maybank shares.
- Thereafter, the 5-day VVAMP price of RM8.85 is adjusted by
the gross DPS of RM0.36, which leads to RM8.49 (taking RM8.85 less RM0.36).
- Subsequent to this, a discount of RM0.49 or approximately
5.77% is applied to the exdividend VWAMP price of RM8.49.
- The DRP price is slightly higher than our estimated RM7.70
reflected in our earnings model currently, but the impact is minimal.
- Thus, we consider the DRP price to be in line with
expectations.
- We maintain Buy on Maybank with a fair value of
RM9.80/share. We believe the key rerating catalysts are:- (a) improvement in
asset quality, which will provide comfort that an up-cycle in loan loss
provisioning will likely be short-lived; (b) better-than-expected ROE; (c)
betterthan-expected dividend.
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