Posted by metaverse > 2 months ago | Report Abuse

祸兮福所倚，福兮祸所伏。I think not many people in Sarawak especially Chinese communities like baimao beside few super rich billionaires timber tycoons as baimao was Sarawak King in olden time and treated Sarawak as his private kingdom. Due to his selfishness which disallowed no one to touch his private kingdom including those corrupted leaders from West Malaysia so until now Sarawak remains a well protected area and on the way to become the economic powerhouse in Malaysia.

Posted by beluga > 2 months ago | Report Abuse

hopefully the price will be premium times price book ratio ... that's also typical price for controlling stake.

Posted by aklobi > 2 months ago | Report Abuse

Congratulations to all the diehard Affinians still holding on to the stock. Affin never disappoints.

Posted by EngineeringProfit > 2 months ago | Report Abuse

I will buy back later

Posted by LubeTrader > 2 months ago | Report Abuse

beluga, from your experience what's the perceived acceptable premium assuming Affin is trading 0.6x PB, for successful takeover?

Posted by klee > 2 months ago | Report Abuse

Politically sarawak n sabah will be allotted one third of all parliament seats in the near future,guaranteeing their 'king maker' role.Economically all the huge o& g reserves are there too.
Further in this era of green renewable energy,sarawak boasts the largest numbers of rivers for hydro power generation.

Posted by klee > 2 months ago | Report Abuse

Go figure the future of affin in sarawakian hands.

Posted by klee > 2 months ago | Report Abuse

Not forgetting Nusantara,sarawak's neighbour.

Posted by klee > 2 months ago | Report Abuse

BNM approval is the final hurdle to clear to send affin into space.
And does BNM dare not to approve? :)

Posted by LubeTrader > 2 months ago | Report Abuse

If everything is done according to procedure and above board there's no reason for BNM to disapprove.

Posted by klee > 2 months ago | Report Abuse

Lets put it this way,if jib gor can get discount 50%,what is a bnm approval for just a mere increase in bank state?Politics do wonders.

Posted by beluga > 2 months ago | Report Abuse

I posted the below 2 weeks ago. I'll copy and repost :

I believe that the purchase consideration for Affin Bank (ABB) is going to represent an average PBR of 1.3 times (with minimum 0.90). Coincidentally, BEA invested in ABB at 1.3 PBR times in 2007. It is my humble opinion. It is fine that you think it's a crazy valuation from me. We can agree to disagree. Everyone is entitled to their opinion.

Basis of and Justification for the Price Book Ratio (PBR) : precedent transactions involving the acquisition of financial institutions listed in Malaysia as below

https://disclosure.bursamalaysia.com/FileAccess/apbursaweb/download?id=226950&name=EA_DS_ATTACHMENTS

(page 8 : refer to 20/313).

Selected precedent transactions involving the acquisition of financial institutions listed in Malaysia PBRs ranging from 0.93 times to 2.35 times over the last 15 years from 2007 are as follows:

2013 Bank Islam Malaysia Berhad BIMB Holdings Berhad 1.88

2008 Bank Muamalat Malaysia Berhad DRB-Hicom Berhad 2.15

2018 Asian Finance Bank Berhad MBSB 1.30

2013 Hwang DBS Affin Holdings 1.28

2012 OSK Investment Bank Berhad RHB Capital Berhad 1.77

2012 ECM Libra Investment Bank Berhad Kenanga Investment Bank Berhad 1.27

2011 RHB Capital Berhad Aabar Investments 2.35

2011 EON Capital Berhad Hong Leong Bank Berhad 1.42

2008 EON Capital Berhad Primus Pacific Partners 2.21

2008 RHB Capital Berhad Abu Dhabi Commercial Bank 2.18

2007 Affin Holdings Bank of East Asia 1.30


2007 MIDF PNB 0.93

2007 RHB Capital Berhad Employees Provident Fund of Malaysia 1.76

2007 AMMB Holdings Berhad Australia and New Zealand Banking Group 1.29

Posted by klee > 2 months ago | Report Abuse

And sarawak sovereign fund Rm8 billions in size n increasing.

https://www.asiaasset.com/post/27799-sswf3010-gte-1030

Posted by klee > 2 months ago | Report Abuse

my best guess is the fund is being activated to buy affin in open mkt

Posted by beluga > 2 months ago | Report Abuse

sarawak, ltat and mindef (government) wants to redistribute some wealth to the people.

Posted by metaverse > 2 months ago | Report Abuse

Abang Jo is a humble person and always walk his talk but in corporate takeover deal this will back fire as you never tip off the wolf of wall street to plan ahead so both sides are trying to buildup war chest and what we see here is only the smoke and yet to see the real fire. So those who are late to the party the night is still young.

Quek Leng Chan is holding the ace card via BEA and the wind is so cold that he is really quiet about this deal and GO is out of the equation as BNM will not approve the talk if the deal involved privatization (just my wild guess) as BNM is trying to institutionalize our banking landscape to avoid the soup opera drama likes Silicon Valley Bank.

Knowing QLC's style on hostile takeover, he will squeeze the last drop of juice out of his opponent's pocket in order to cease fire and call it a day or meaning to say "2011 EON Capital Berhad Hong Leong Bank Berhad 1.42"

Posted by beluga > 2 months ago | Report Abuse

I have explained in my blog
https://klse.i3investor.com/web/blog/detail/LTATneedToSellAffinBank/2024-02-14-story-h-188452748-The_Reasons_I_Believe_Sarawak_Will_Trigger_Mandatory_General_Offer_MGO_

Posted by klee > 2 months ago | Report Abuse

epf block,anyway its just matter of time

Posted by EngineeringProfit > 2 months ago | Report Abuse

Optimism +++++

Posted by klee > 2 months ago | Report Abuse

negative ppl can only be those who dunno fa,ta n current development of affairs

Posted by GSX1111 > 2 months ago | Report Abuse

Affin NAB is 4.69. If 1 times of PBV, means likely MO at RM4.69. That is huge premium of current price RM2.65.

Posted by GSX1111 > 2 months ago | Report Abuse

But wonder why the market price did not react to this NAB of 4.69. It is kind of slow climb.

Posted by klee > 2 months ago | Report Abuse

sarawak still negotiating with ltat,too fast price appreciation is not favourable to buying party

Posted by rohank71 > 2 months ago | Report Abuse

#GSK, today banks don't trade at premium to book coz of lots of Toxic assets/book. even US banks trade at discount to book. Affin is know to have toxic assets which doesn't provide any returns, hence it has been trading a huge discount. one way is to write down the toxic asset and do a deal. which will mean the book value will drop...
I have been hoping for 0.65 to 0.75 times book. or abt 3.20 per share.
LTAT also knows that Affins book is toxic.

Posted by LubeTrader > 2 months ago | Report Abuse

rohank71, appreciate you pointing out this factor that many failed to consider. I'm pretty sure there are non-performing, money-losing assets/investments in Affin's book. Still after discounting these, fair value per share as you calculated is 3.20- Yes the night is still young.

Posted by beluga > 2 months ago | Report Abuse

Indeed the assets quality of Affin has always been doubt by the market. That explains the huge discount. Mainly it’s because of their affiliation with LTAT and Boustead.

At the same time, I think the market failed to recognise that no matter how badly managed these two institution are, they have an IMPLICIT guaranteed from MOF (the government)… yes in other words, taxpayer money. It is not too-big-to-fail case ; but too-political-important-to-fail. It’s just like Tabung Haji. You do not want to upset the people from the Armed Forces.

Eventually these implicit guaranteed, became an explicit guaranteed from the government. Just like what happened few months ago, the MOF guaranteed the RM2 billion loan for LTAT/BHB in Oct 2023 for them to takeover BPlant and remaining to settle the debt due in December 2023. Yes, almost 900 million loan guaranteed by MOF for LTAT/BHB to settle their debt (sukuk) that was due in Dec 2023. (correct, NEW debt to pay OLD debt, but this time EXPLICIT guarantee by government. From implicit to explicit..).

These assets quality in question…however improbable to default were to crystallise, ultimately, it won't be Affin Bank's problem. It will be Malaysians' problem.

Maybe this short opinion shall explain why our Ringgit is always on pressure..and hitting low. The country debt and liabilities is RM1.45 trillion .. excluding those implicit guarantee commitments.

ps : US banks and our banks, especially Affin are ocean wide different. Ours are relatively “easier" to value due to the almost non existence of complex structured derivatives in their books. Here, mostly plain vanilla kind derivatives only.

Posted by beluga > 2 months ago | Report Abuse

From Boustead Holdings Berhad Independent Adviser Circular to Shareholders by Kenanga Investment Bank :

"We are of the view that the PBR is the most appropriate valuation methodology for ABB due to, amongst others, the following: (i) We have adopted the PBR valuation methodology in arriving at the estimated value of ABB in view that ABB Group constitutes financial entities.

For a financial entity, the NA size can be an important driver of future potential earnings and hence its valuation given that the size of the NA would, amongst other, determine the scale of financing activities for the financial entity to undertake. Further, the assets of financial entities are largely in the form of financial assets such as loans, government and corporate bonds and equity investments, whereby these assets as well as the investment financial entities’ liabilities are recorded at current market values as at the balance sheet date as reported in the financial entities’ audited financial statements.

As at 31 December 2022, more than 90% of ABB’s unaudited total assets comprise of cash, deposits, financial assets and loans. The book values of such assets are expected to be close to the market value.

We are of the view that the carrying values of these assets are expected to approximate to their fair value after taking into consideration, amongst others, the nature of cash and deposits which are expected to be relatively liquid as well as the annual impairment review on the financial assets and loans being conducted on the carrying value of these assets. ABB has provided allowance for impairment losses on financing and other financing as well as impairment losses on other assets. Based on information made available, as at the LPD, we are of the view that there is no indication of potential impairment which may be required on the carrying values of these assets as at 31 December 2022.

Premised on the above, we are of the view that the PBR approach would be most appropriate valuation methodology to value ABB "

Posted by metaverse > 2 months ago | Report Abuse

Yes, confirmed beluga is a full time US fund manager. Small traders like us don't have this kind of financial knowledge to understand why Abang Jo has underpaid Affin. I am totally surprised Quek Leng Chan failed to put up a good show as this kind of half-baked takeover deal is his expertise to squeeze his opponent so in a way he thinks to have a business partner like Abang Jo will add lubricant to his HL group because down the road Sarawak will be flooded with mega projects. PMX dare not to mess with Abang Jo, DAP has to fly to Sarawak and said sorry to them and even with an ACE card on hand, QLC also keep quiet and let Abang Jo show hand as if he is holding the best card on the table 😁

Posted by beluga > 2 months ago | Report Abuse

Haha. I wish @metaverse. If I'm fund manager, you would see XXX fund owns 4.9% of ABB already in the shareholders list! Unfortunately, I do not have OPM to take large stake in ABB. I am just a small fish investor. I am a minority shareholder of ABB. I have a vested interest in ABB. I am bullish on ABB since long time. I did went to post graduate business school at Cass. I had investment experiences. I have much interest in finance. I read a lot. I am investing for my own only. Maybe Affin IB should offer me a job though. PM me the offer! Haha. :P

Posted by rohank71 > 2 months ago | Report Abuse

#beluga, thank you for your explanation and clarification. let's all hope for the highest price possible for Affin, which may force Swak to work hard on their huge investment.

Posted by LubeTrader > 2 months ago | Report Abuse

One question guys...something I can't seem to find an explanation. Why is EPF actively disposing?

Posted by metaverse > 2 months ago | Report Abuse

Just a wile guess. Maybe due to Affin's low rating on ESG as EPF is one of the top 20 largesnt pension funds in the world so when they have to benchmark each other how they are ranked in ESG.

Top 20 largest pension funds in the world:

https://i.postimg.cc/Bb5HSj8p/top-pension-fund.jpg

https://www.sinchew.com.my/news/20240223/yl/5411308

泰益功过历史自有定谳
在维持砂拉越现有的和谐与多元基础上，泰益的贡献不可抹杀，而砂拉越在联邦政治版图中所拥有的政治地位，尽管是已故首长阿德南沙登的政治遗产，但这也是泰益的保护主义所奠基而来的。

Posted by metaverse > 2 months ago | Report Abuse

Fast forward to year 2030, due to political issue, most high tech companies in Kulim High Tech Park faced no choice but to relocate to Bintulu to take advantages of Bintulu's port facility and clean energy such as hydrogen. Due to constant water issue, most high tech companies in Penang also pulling out and move their operation next to WD's mega factory in Sarawak. Due to energy crisis in Sabah because Sabah Energy SB is buying 0.4 from KL's IPP and selling 0.3 to Sabah's consumer so those small factories in Sabah also faced no choice but relocate to Sarawak and Abang Jo said in order to create a self-contained economy to decouple from West Malaysia's collapsing economy all companies doing business in Sarawak is "encouraged" to use only the banking services provided by Sarawak bank. Also in year 2030, the price of oil is as low as can water as no one will use dirty fuel anymore 😁

Posted by metaverse > 2 months ago | Report Abuse

Big data firms need to use a lot of cold water to cool down their servers and due to the pressure from environmental group those big data firms have no choice but to avoid dirty energy and use clean energy. So for that matters, most of the high tech firms will eventually relocate to Sarawak as Sarawak have the longest Kajang River with plenty of fresh water and Sarawak is also a top player in RE. As far as the problem of skilled engineers is concerned, due to the Sarawak's natural beauty (to attract international top notch digital nomads) and their world's class education system with the ability to speak international languages fluently this well protected region will become the next economic superpower.

Posted by beluga > 2 months ago | Report Abuse

Even WEIRDER is that EPF only dispose Affin.

Malaysia has 10 listed banks. EPF choose to dispose ABB while purchased ALL of the rest. Interesting right?

Did EPF send a team to do a due diligence on ABB? I doubt.
Did ABB management allow EPF team to look into its books other than publicly available information? I doubt.
Did ABB fail BNM stress test ? Nope.
Did Affin Capital Adequacy Ratio and Liquidity Coverage Ratio (or other metrics like Loan loss coverage etc) fall below regulatory requirement or below its peer average? Nope.
Did any rating company downgraded ABB debt facilities? Nope.
Is ABB Gross Impaired Loan much higher than its peers? Nope.
Did ABB fail to make its ROE greater than its cost of capital? Nope.
Is ABB trading at premium compared to its peer? Nope. In fact the cheapest.

All the challenges especially macroeconomic challenges that ABB is facing is also faced by all other banks. So why did EPF choose to dispose Affin only? I also don’t know. :)

But then, EPF total funds is RM 1 TRILLION. The transacted value in ABB is just a drop in the ocean. I don’t know what they are doing or trying to do with this disposal.

Posted by LubeTrader > 2 months ago | Report Abuse

Is it possible a "hidden entity" is involved?

Posted by aklobi > 2 months ago | Report Abuse

@beluga, Affin is a promising stock, but has gone up wildly in very short time. Also, as @TheContrarian mentioned before, the medium term outlook for Affin isn't so bright considering the costs the bank would endure after the Sarawak takeover due to opening new branches etc. Taking all that into account, I believe a price between RM 2 - 2.20 (FOR THE MEDIUM TERM) is a fair price. The long term price shouldn't be below RM3. The only thing going on currently is the nonstop hype and @LubeTrader's "hidden entity" conspiracy theories.. lol

Posted by chamlo > 2 months ago | Report Abuse

EPF disposed yes in news but not Sarawak state govn buying more.

Posted by chamlo > 2 months ago | Report Abuse

How about LTAT so many resignation since Sarawak state govn announced will buy more? Is it Sarawak state willing to pay only RM 2.2 but not more so LTAT top managements resign?

Posted by TheContrarian > 2 months ago | Report Abuse

Sarawak is paying RM2.40 based on leaked documents.

Posted by TheContrarian > 2 months ago | Report Abuse

Sarawak doesn't buy from the open market because they are cheapskate, they want to buy cheaply off the hands of LTAT who desperately need to raise cash because they got trapped into doing a takeover of Boustead Plantation.

Posted by TheContrarian > 2 months ago | Report Abuse

LTAT is very broke and without selling a block of Affin it would default on Boustead Holdings huge loans.

Posted by TheContrarian > 2 months ago | Report Abuse

EPF sells Affin to re-balance their bank shares portfolio, moving out of Affin into Bank Islam as EPF funds are now segregated into Shariah and Conventional. More EPF account holders are opting for Shariah.

Posted by TheContrarian > 2 months ago | Report Abuse

During CNY I met Quek and asked him if he were going to make a hostile takeover of Affin, he laughed and laughed and laughed.

Posted by TheContrarian > 2 months ago | Report Abuse

I am totally out of Affin and made a gain of around RM70k. Now I am in Bank Islam.

Posted by aklobi > 2 months ago | Report Abuse

@TheContrarian, will there be any market correction on the horizon soon?

Posted by TheContrarian > 2 months ago | Report Abuse

I am expecting a mid-March market correction.

Posted by chamlo > 2 months ago | Report Abuse

Why Bursa not yet announce? TheEdge news not reliable?

Posted by TheContrarian > 1 hour ago | Report Abuse

Sarawak is paying RM2.40 based on leaked documents.

Posted by TheContrarian > 2 months ago | Report Abuse

@chamlo, the sale from LTAT to Sarawak is awaiting Bank Negara approval.

Posted by TheContrarian > 2 months ago | Report Abuse

New Defense Minister is not happy with the proposed sale, maybe he doesn't want to sell 25% but less or maybe he thinks Sarawak is shortchanging LTAT at RM2.40 and is demanding a higher price.