1155 MAYBANK - Dividend ex-date likely to be within next two months

by **Cals** Mon 08 Apr 2013, 10:10

Dividend ex-date likely to be within next two months
Business & Markets 2013
Written by theedgemalaysia.com
Monday, 08 April 2013 09:56

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MALAYAN BANKING BHD []
(April 5, RM9.70)
Maintain hold at RM9.45 with a fair value of RM10.20: We are maintaining our “hold” rating on Malayan Banking Bhd (Maybank), with an unchanged fair value of RM10.20 per share. This is based on a return on equity (ROE) of 14% of 2013 financial year (FY13F) ending Dec 31, which translates into a fair price-to-book value (P/BV) of 1.9 times.

Maybank recently announced that the application for the listing and quotation of up to 288 million new ordinary shares of RM1 each, to be issued pursuant to the sixth dividend reinvestment plan (DRP) on the Main Market was submitted to Bursa Securities on March 26.

It is now pending Bursa’s approval. Once the green light is obtained, we expect Maybank to seek Bank Negara Malaysia’s approval.
Recall that this is for its final dividend of FY12, which was announced in February 2013. To recap, the final dividend comprises: i) gross dividend per share (GDPS) of 18 sen less 25% tax (net dividend per share of 13.5 sen); and ii) single-tier dividend of 15 sen per share.

The proposed gross dividend consists of a cash portion of four sen single-tier dividend to be paid in cash, and an electable portion of 29 sen (net 24.5 sen), whereby the electable portion comprises 11 sen single-tier dividend and 18 sen franked dividend (net 13.5 sen).

In previous historical DRP plans, the earliest ex-date was the final dividend for the six-month financial period ending Dec 31, 2011, where the ex-date was April 26, 2012.

This was 64 days from the date of declaration of dividend. Assuming a similar timeline, we estimate that the earliest ex-date for this sixth DRP plan would be April 26.

As for FY11’s final dividend, the ex-date was 90 days from the date of declaration of dividend. Assuming a similar timeline, we estimate that the ex-date for this sixth DRP plan would be May 27.

We believe the ex-date for the sixth DRP is likely to fall within this time frame, that is, somewhere between the earliest possible date of April 26 and May 27.

The historical subscription rate ranged between 86% and 91%. Maybank’s final dividend was above expectations with a total dividend payout ratio of 75%.

We are maintaining our dividend payout ratio at 55.9% for FY13F. — AmResearch, April 5