The Employees’ Provident Fund (EPF) has been accumulating shares in AMMB Holdings Bhd recently, likely driven by expectations that the banking group would post strong quarterly financial results.
According to filings with Bursa Malaysia, the pension fund owns a 12.93% stake in AMMB currently, up from 11.1% as at June 30, 2010.
EPF bought a total of 37.5 million shares representing 1.24% equity interest in the banking group within the past two weeks. AMMB was also the only domestic banking group the pension fund was seen buying during this period.
Banking analysts said the pension fund could be acquiring the shares on expectations that the banking group’s third quarter ended Dec 31, 2010 (3Q10) earnings will be fairly strong. AMMB is likely to announce its numbers within the next few days.
“AMMB is likely to post strong earnings from higher loan growth and non-interest income, and may also beat analysts’ consensus. The banking group is also trading at attractive multiples after a selldown in its shares recently,” an analyst said.
AMMB dipped 45 sen to close at RM6.15 on Feb 11, from RM6.60 on Feb 8. The stock also saw heavy trading with volume surpassing 18 million shares on Feb 10 and 11. On Feb 14, the counter closed 12 sen higher at RM6.27.
In 2Q10, AMMB’s net profit rose 38.6% to RM332.9 million from RM240.2 million, underpinned by higher interest income and revenue from the life assurance division.
Banks will be announcing their financial results for the quarter ended Dec 31, 2010 in the next two weeks, following Public Bank Bhd (PBB), which announced its financial results for the year ended Dec 31, 2010 at end-January.
PBB’s net profit for the year rose 22.5% to RM3.05 billion from RM2.5 billion a year earlier, underpinned by higher interest income and non-interest income.
On Feb 14, all banks, except for EON Capital Bhd, closed higher as Asian markets including the local bourse rebounded as investors shrug off better-than-expected trade data from China and concerns fade over protests in Egypt.
Some of the banks were Malayan Banking Bhd which closed one sen higher to RM8.54, while CIMB Group Holdings Bhd rose 10 sen to close at RM8.20. RHB Capital Bhd ended 12 sen higher to RM8.01. - by Yong Yen Nie of theedgemalaysia.com
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