RHB Capital - DRP price set at RM6.52/share HOLD

- RHB Capital announced that the issue price for its dividend reinvestment plan (DRP) in relation to its final DPS for FY11 has been set at RM6.52. 

- This is in relation to the final dividend for FY11 which was declared on 28 February 2012. The final dividend comprises a gross dividend of 11.82 sen/share less 25% tax (net dividend: 8.87 sen/share) and a single-tier dividend of 5.59 sen/share. 

- The issue price for the DRP of RM6.52/share is computed based on the volume-weighted average market price for the five market days (up to and including 25 April 2012) prior to the price fixing date of RM7.41, minus the gross dividend per share of 17.41 sen and applying approximately a 10% discount equivalent to RM0.72.

- The ex-date is on 10 May and the entitlement date is on 14 May. 

- The new RHB Cap shares arising from the DRP will be listed on 12 June. 

- The DRP discount of 10% is the same as the previous tranches of DRP.

 

- To recap, the interim gross dividend for 2011 was declared on 24 August 2011. Gross dividend declared was 8 sen less 25% tax. The DRP price for that tranche of dividend was set at RM6.44/share, with 63.2% of shareholders opting for the DRP. 

- Similarly, the DRP discount for the previous tranche of FY10 final dividend was also set at 10%. The final gross dividend was 21.38 sen less 25% tax, while the DRP price was set then at RM7.56/share, with 84.17% of shareholders opting for it.

- We expect RHB Cap’s upcoming results to be in line with our forecasts. While we have RHB Cap on a hold, we believe there is limited downside, given the current cheap P/BV valuation. We would advocate for the DRP plan given the 10% discount.   

Source: AmeSecurities