Friday, July 15, 2011

CIMB Research ups Maybank TP to RM11.20

KUALA LUMPUR: CIMB Research has replaced RHB Capital with Maybank as its top pick for the sector as its well-diversified business portfolio makes it the biggest bank beneficiary of the implementation of Economic Transformation Programme (ETP).

It said on Friday, July 15 that the ETP spillovers will drive its investment banking income, consumer and business loan growth as well as the growth of its insurance and asset management businesses.

'We retain our earnings forecasts but raise our target price from RM10.30 to RM11.20 (10% above the DDM value) as we increase the assumed dividend growth rate from 7.7% to 8.7% to reflect ETP prospects.

'Our BUY rating is reaffirmed, premised on the potential re-rating catalysts of (1) ETP catalysts, (2) swift expansion in Indonesia, (3) faster-than-expected loan growth, and (4) the pick-up in investment banking income. The stock also commands the best dividend yield of about 7%,' it said.

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