@redhotpepper, Affin was so undervalued it was just a matter of time before it surged. Probably some foreign funds decided to buy. Price will stay up only if LTAT or Boustead or EPF don't sell down as they always do.
In 2007, the state pension fund EPF made a mandatory general offer to all remaining RHB shares after it bought UBG's stake in RHB. That MGO made EPF hold 82%. Then subsequent year , EPF sold 25% to Abu Dhabi, reduced its stake from 82% to 57% . The rest is history. Bank can be "privatised" under FSA , only need approval from MoF via BNM. If Anwar say ok, then it's ok.
I think LTAT/Boustead will have to sell Affin. They need more funds to settle their debt. Recent 33% divestment BPlant transaction is not enough. I confidently still increase my holding and bet more. Any price drop is good investment opportunity.
yes if drop more, i buy more. been accumulating. i was shareholder of Boustead (BHB). They bought us out at 0.855 per share when the net asset value of BHB for Y2022 was at 1.66 . Within few months, they sold BPlant at RM1.55 , more than double what they "advise" us the value for BPlant (at 0.72) was when they try to privatised BHB (I read the IAC ).
Mediocre Banking Sector Results: NIM And NOII Centre Of Discussion By Editor - September 10, 2023
The banking sector saw a mediocre season with earnings entirely within expectations, this is despite some surprises in tailwinds and headwinds. NIM compression this time was a lot heavier than previously guided for (recall that banks were guiding for “stable-to-minor” compression in 1Q23). NOII improvement was expected, being guided for as a core earnings driver (which came true, but it was unevenly distributed).
MIDF analysts give their guidance for the sector and it’s more skewed towards the negative, largely due to the slower-than-expected NIM recovery and potential asset quality irritation. Nearly all banks revised their NIM guidance downward.
However, on a more positive note, future quarters may see possible positive revisions to NCC guidance (they were initially too conservative). Earnings: Relatively stable, NIM and NOII are central focus. Aggregate Core Net Profit (Core NP) up by +0.6%qoq. It was a good quarter for topline – despite NIM compression, NII largely remained stable to slightly negative while NOII did mostly see solid improvement, mostly on the side of treasury income (though in some cases disappointed).
Provisioning did pick up from last quarter’s softer activity, with a few banks amping up on credit costs for a poorer macroeconomic outlook and asset quality irritation. There was a minor issue of slightly elevated tax rates in the quarter, due to higher provisioning and investment-related gains that are less tax deductible.
As for the balance sheet, growth was poor but expected to pick up. Weaker corporate loan growth offered downside pressure. Retail contributions – particularly solid mortgage and hire purchase growth – were bolstered by strong unsecured loan offerings. Unfortunately, this was not enough to offset weaker growth coming from the non-retail side – though the industry has guided for a much healthier post-election pipeline in 2H, maintaining their far-from-target loan growth forecasts. Deposit growth was more mixed, but liquidity remains ample.
CASA attrition on the other hand took a light breather as pricier FDs matured without renewal but should resume in subsequent quarters. Different banks took different approaches to managing NIM optimisation, hence reporting varying quarterly deposit growth figures.
Increasing impairment pressure within certain brackets, but heavy write-offs keep GILs manageable. Asset quality pressure mainly came from the residential mortgages and SMEs linked to RA loans, though there was some irritation already coming from riskier overseas and unsecured segments. Few banks have guided that GIL ratio is close to peaking (or has already peaked). While LLC values have come down, some banks are looking at chunkier recoveries in the coming quarters to keep this manageable while refraining from making larger allocations.
Among the banks, Maybank saw an unexpected, massive non-fee income gain within the quarter, CIMB displayed exceptional performances in almost all aspects, especially loan growth. But Affin saw an abnormally sharp sequential drop in NIMs, which dragged earnings. RHB brought in decent quarterly earnings, but this was largely driven by overlay writebacks – while everything else was lacklustre.
From a pure valuation perspective, BIMB remains the most attractive while Affin is the least. Moving forward, the house is neutral for 2H outlook and doubts that ROE outlook is going to be that much better than 1H. Loan growth outlook is positive – banks are very optimistic about 2H’s non-retail pipeline. NIM outlook is more neutral – i.e. most banks are guiding stable to positive movement, though MIDF is cautious of year-end deposit competition.
On the other hand, more banks are opting for full-cash dividends. BNM doesn’t seem likely to exercise any additional leniency in capital ratio levels soon. Regardless, several banks have already guided for higher dividend payouts and halting DRP programmes – signalling that they are happy with current CET1 levels.
Over the years, I invested in Affin and Boustead (privatised now). But I have increased my interest significantly in affin recently after reading all the news reports, circulars on Boustead etc. All the variables just strengthen my conviction that Boustead will have no choice but to sell affin to settle their huge debt.
Beside that, affin is trading at a huge discount to its net assets, widest among its banking peers. 60% discount! Even if my thesis is wrong, I think the margin of safety is there.
The problem is there is not enough of driving force to back AFFIN's upward share trajectory. Any upside are short lived. I remember in 2022 it traded to 2.5 or something. Lucky to even get my equity out at 2.3
When will Affin hit RM2.50 again? When will we have happy moments? Rising again ...... Or is this the end? When will we see RM2.50 again? When will we have happy moments? Will it rise again? Or is this the end?
This book is the result of the author's many years of experience and observation throughout his 26 years in the stockbroking industry. It was written for general public to learn to invest based on facts and not on fantasies or hearsay....