- We maintain our HOLD rating on Malayan Banking Bhd (Maybank), with slightly lower fair value of RM9.80/share. This is based on an adjusted ROE of 13.4% (vs. 13.5% earlier) for FY14F, and an unchanged fair P/BV of 1.7x.

- Our ROE estimate is adjusted to include the latest details of its dividend reinvestment plan (DRP).

- Maybank recently announced that the issue price of the new shares pursuant to its latest DRP plan applicable to the final cash dividend, has been fixed at RM8.95 per new Maybank share.

- This is in relation to its proposed single-tier final dividend for FY13 of 31 sen, whereby the DRP will apply to an electable portion of 27 sen and the remaining portion of the 4 sen to be paid in cash.

- The issue price is based on the 5-day volume weighted average market price (VWAMP) of RM9.74 per Maybank share up to and including 15 April 2014, being the last trading day prior to the Price-Fixing Date for the issue price of new shares.

- The issue price was also determined after adjusting for the following:- (i) a dividend adjustment of RM0.31 to the 5-day VWAMP; and (ii) a discount of RM0.48 which is approximately 5.09% discount to the ex-dividend VWAMP of RM9.43.

- The discount of 5.09% is the smallest discount for Maybank’s DRP plans since it was launched in 2010. The previous discounts ranged from 5.17% to 9.90%% (see Table 1 in following page).

- We estimate the dilution to issued share base at 2.6%for the latest DRP, if assuming an 86% take-up rate.

- The ex-date is 29 April 2014.

- The entitlement date is 2 May 2014.

- The payment date is 30 May 2014.

- The targeted listing date for the new shares is 2 June 2014.

Source: AmeSecurities