- We maintain our HOLD rating on Malayan Banking Bhd (Maybank) with an unchanged fair value of RM9.80/share. This is based on an unchanged ROE of 13.5% for FY14F and an unchanged fair P/BV of 1.8x.

- Maybank recently announced details of its dividend reinvestment plan (DRP) price for its interim dividend. The issue price for the latest DRP has been fixed at RM9.30/share.

- This is related to its latest interim dividend of 24 sen. The DRP will apply to an electable portion of 20 sen while the remaining amount of 4 sen is to be paid out in cash.

- The issue price is based on the five-day volume weighted average market price of RM10.08 up to and including 11 September 2014, being the last trading day prior to the price-fixing date for the issue price of new Maybank Shares

- The issue price is also after adjusting for the following: (a) a dividend adjustment of RM0.24; and (b) a discount of RM0.54 which is approximately 5.49% discount to the Ex- Dividend VWAMP of RM9.84.

- The discount of 5.49% is slightly higher than the previous tranche’s 5.09%.

- We have updated our earnings model for the latest announcement, and have assumed a take-up rate of 86%, similar to the latest completed DRP.

- We estimate the latest DRP to likely increase the issued share base by 2.3%.

- The ex-date has been fixed on 29 September 2014.

- The entitlement date is 29 September 2014.

- The book closure date is on 29 September 2014.

- The targeted listing date for the new shares is on 29 October 2014.

Source: AmeSecurities