Public Bank; Hold; RM19.08
Price Target: RM18.00; PBK MK

Public Bank (PBK) announced that it will merge its local and foreign tranche shares under a single stock code. The transaction is scheduled for completion by 2Q14 subject to approvals from Bursa Malaysia, shareholders (at the bank’s forthcoming AGM) and other relevant authorities. The proposal does not have any effect on PBK’s share capital and financials.

The reference opening price of the merged local and foreign tranche shares will be the last closing price of PBK local tranche shares prior to the merger of the local and foreign shares or any other price determined by Bursa.

PBK is the only listed company on Bursa quoting its shares separately as local and foreign shares. PBKF shares commenced listing on 2 Oct 1989 due to the inconvenience experienced by foreign investors in trading shares due to the 30% foreign shareholding limit.

Investors buying the foreign tranche are guaranteed of a voting right. As at 30 Sep 2013, 31.71% of issued shares of PBK were held by foreigners. While all foreign shareholders would be entitled to the rights and entitlements attached to the shares, 1.71% of the foreign shareholders are not entitled to voting rights. We currently have a HOLD recommendation. Our RM18.00 TP is under review.

Source: HwangDBS Research - 3 Jan 2014