- We maintain our HOLD rating on CIMB Group Holdings Bhd (CIMB) with an unchanged fair value of RM7.30/share for FY14F. This is based on an FY14F ROE of 12.7%, and an unchanged fair P/BV of 1.7x.

- CIMB’s foreign shareholding extended its downward trend to ten consecutive months, with foreign shareholding easing further to 33.4% as at end-March 2014 from 35.6% a month earlier, and from a 52-week high of 42.7% in end-May 2013.

- However, the foreign shareholding statistics for March 2014 is based on the enlarged issued share base of 8,229.3mil on 12 March 2014, which takes into account the new share issue of 500mil arising from CIMB’s new share placement in January 2014.

- We estimate that the net number of shares sold by foreign shareholders had slowed down significantly to 16mil in March 2014 and 16mil in February 2014 (see Chart 1 in following page 2).

- To backtrack further, the January 2014’s foreign statistics data implies a net foreign buying of 154mil shares in January 2014, which we believe is partly due to the new share placement.

- This means that, for the year-to-date, there was a net buying of 121mil shares by foreign shareholders in the January 2014 to March 2014 period, compared to FY13’s net foreign selling of 375mil.

- The company had highlighted earlier in its latest briefing that it expects a challenging year ahead for ASEAN markets. It remains watchful on overall asset quality.

- Maintain HOLD.

Source: AmeSecuerities