We added 1,500 shares of AMBANK @ RM6.72/share to the Thematic Portfolio on last Friday. The stock is a laggard among the smaller banks and has underperformed the FBMKLCI since last year, mainly due to fears of a dilution in its earnings per share following its pricey Kurnia Insurans and MBF acquisitions. The stock is now trading at the lowest point of its historical PER band as well as its PBV band for the last five years. We expect the share price to play a catch-up in 2013 as AMBANK has clearly demonstrated a track record of delivering quality and consistence growth in its ROE under ANZ’s leadership. It is a TOP PICK for our 2Q13 Strategy with a price target of RM7.40, implying 1.7x FY14 PBV or 11.7x FY14 PER.

Source: Kenanga