'Malaysia banks may see new M&A wave'

Malaysian banks are likely to witness the next merger and acquisition wave with changes imminent in strategic ownerships, says DBS Vickers Securities.

The target banks would benefit from input the potential stakeholders could bring to the table to improve stand-alone value propositions such as AMMB-ANZ, it said in a research note on Asean banks today.

RHB Capital, one of the cheapest large capitalised banks in Malaysia with attractive valuations, is a bet for an imminent M&A play, DBS Vickers said.

It also said if ANZ were to raise its stake in AMMB, it sould see ANZ play an even greater role in AMMB and this development would also be positive for other banks that may be looking for new foreign strategic stakeholders.

Within emerging Asean, DBS Vickers still preferred Malaysian banks over Thailand and Indonesian banks.

Although it liked Thailand banks for its investment recovery cycle and stronger earnings growth, the event-driven catalysts in Malaysia are more apparent providing both near and longer term valuation upside, it said.

"For our Asean picks, we have replaced Maybank with Hong Leong Bank as our top pick among Malaysians banks for its strength domestically along with Thailand''s Kasikornbank Public Company Ltd, Bank Rakyat Indonesia and OCBC Bank," DBS Vickers said. -- Bernama

"For our Asean picks, we have replaced Maybank with Hong Leong Bank as
our top pick among Malaysians banks for its strength domestically along
with Thailand''s Kasikornbank Public Company Ltd, Bank Rakyat Indonesia
and OCBC Bank," DBS Vickers said.

Warrants	HLBANK-CA
Warrants Reference Price	0.300
Warrants Last Done	0.000
Volume	0
Share Reference Price	10.580
Share Price	10.400
Exercise Price	8.000
Exercise Ratio (warrants per share)	8
Interest Rate(%)	2.9178
Dividend Yield(%)	1.7308
Expiration Date	15-Apr-2011
Days to Expiry	1
Implied Volatility(%)	0.0033
Gearing (X)	4.3333
Effective Gearing (X)	?
Premium(%)	0.0000

if ANZ were to raise its stake in AMMB, it sould see ANZ play an even greater role in AMMB

Warrants	AMMB-CH	AMMB-CJ
Warrants Reference Price	0.415	0.160
Warrants Last Done	0.000	0.150
Volume	0	500
Share Reference Price	6.390	6.390
Share Price	6.420	6.420
Exercise Price	5.000	6.000
Exercise Ratio (warrants per share)	4	5
Interest Rate(%)	2.9178	2.9178
Dividend Yield(%)	1.4642	1.4642
Expiration Date	13-May-2011	21-Nov-2011
Days to Expiry	29	221
Implied Volatility(%)	100.0000	25.2357
Gearing (X)	3.8675	8.5600
Effective Gearing (X)	3.3681	6.0644
Premium(%)	3.7383	5.1402