Wednesday, September 21, 2011

HL Bank, HLFG among major decliners

KUALA LUMPUR: Shares of Hong Leong Bank and Hong Leong Financial Group (HLFG) were among the major decliners in thin trade on Wednesday, Sept 21 despite that blue chips had staged a mild rebound amid a broader cautious market.

At 4.04pm, HL Bank was down 20 sen with 425,700 shares done.'' This was the lowest since May 9.

HLFG shed 16 sen to RM11.12 with 96,600 units transacted. The share price was also at the lowest since May.

However, the FBM KLCI rose 6.84 points to 1,417.48. Turnover was 569.11 million shares valued at RM910.27 million. The broader market was mixed with 280 gainers, 294 losers and 292 stocks unchanged.

In a recent research report, Maybank Investment Bank Research maintained its Hold call on HL Bank with a target price of RM13.50 (cum rights) based on a 2012 price-to-book value of target of 2.0 times.

HL Bank had earlier proposed a one-for-five rights issue at RM8.65 per rights share. The pricing was a 30% discount to the five-day volume-weighted average market price of RM12.41.

Proceeds from this issue will go towards part funding the acquisition of EON Capital. The cash acquisition price of RM5.3 billion involved a payment of RM5.06 billion for the assets and liabilities of EON Capital along with a RM311.9 million net dividend payment from EON Bank to EON Capital.

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