Hot Stock Public Bank top decliner on overvaluation, profit taking

by **Cals** Mon 07 Apr 2014, 16:52

Hot Stock Public Bank top decliner on overvaluation, profit taking

Business & Markets 2014

Written by Chong Jin Hun of theedgemalaysia.com

Monday, 07 April 2014 14:26

KUALA LUMPUR (Apr 7): Public Bank Bhd fell as much as 3% to lead the exchange's decliners list at afternoon break after analysts said the stock was overvalued. Public Bank shares are traded under PBBANK and Public Bank Bhd-Foreign (PBBANK-O1).

At 12.30pm, PBBANK changed hands at RM20.30 with some 1.2 million shares done. The stock had earlier fallen as much as 68 sen to RM20.12.

PBBANK-O1 settled at RM20.20 with 121,300 shares done. The stock had earlier declined as much aS 64 sen to RM20.16.

TA Securities Holdings Bhd wrote in a note today that "the recent run-up in share price, we opine, has stretched valuations further. We maintain our SELL recommendation on PBB."

"Furthermore, we find dividend yields of some 2.6% less attractive now compared to the 4-5% yield offered by other banking peers such as CIMB, Alliance and Maybank," TA said.

TA has raised its target price (TP) for Public Bank shares to RM20.70.

Meanwhile, Kenanga Investment Bank Bhd wrote in a note today that the firm had a TP of RM20.75 for Public Bank shares.

This comes with a "market perform" call for the stock.

PBBANK and PBBANK-O1's decline on profit taking today followed both stocks' 4% rise last Friday. PBBANK and PBBANK-O1 rose 80 sen and 84 sen respectively to close at RM20.80 then.

PBBANK and PBBANK-O1 has been closely watched ahead of the merger of both stocks this April 16.

The reference opening price of the merged entity will be PBBANK's closing price on April 15.

Following the merger, PBBANK-O1 will be removed from Bursa Malaysia. Hence the final trading day for PBBANK-O1 will fall on April 15.