• We maintain our HOLD rating on CIMB Group Holdings (CIMB) with an unchanged fair value of RM4.70/share. Our fair value is based on an unchanged ROE of 9.5% for FY16F, leading to an unchanged fair P/BV of 1x.
• CIMB’s foreign shareholding declined further to 28.0% in end-October 2015, from 28.4% in the preceding month.
• CIMB’s foreign shareholding has fallen again to a new multi-year low and it is now below the trough of 31.3% recorded in November 2008 during the external crisis (see chart in following page).
• We estimate the net number of shares sold by foreign shareholders at 23mil shares in October 2015, compared to net selling of 8mil in September 2015. · On a year-to-date basis, this means there was a net selling of 367mil shares by foreign shareholders from January to October 2015 (see chart in following pages).
• This is compared to a total net foreign buying of 127mil shares for the whole of 2014 and net selling of 375mil shares in 2013.
• In terms of outlook, recall that we think that there may be new concerns on its capital level.
• To recap, from our earlier company visit on 21 October, the key new information for us were: (a) the lower fullyloaded group CET1 ratio of 9.2%, compared to our earlier estimate of 9.7%; (b) possibility of CET1 ratios being raised to 11%; (c) potential impact to capital ranging from 50bps to 150bps under CIMB’s in-house stress test scenarios.
• Maintain HOLD.

Source: AmeSecurities Research - 13 Nov 2015