Posted by observatory > 2023-06-12 16:37 | Report Abuse

As mentioned before, if sharehodlers have to subscribe to DRP in order not to get diluted, the dividend yield is not 7.5%.
The effective dividend yield is (RM0.40 - RM0.10)/ RM5.31 = 5.6%

Posted by icst1975 > 2023-06-12 17:49 | Report Abuse

Sharehoders should voiced out to RHB management about the very detrimental impact of DRP on both the short term and long term negative effect on the share price and request that the bank should just declare a smaller dividend if Bank need to conserve more cash.

Posted by observatory > 2023-06-12 19:35 | Report Abuse

I agree DRP is not fair to retail investors.
However, to put it in perspective, the five rounds of DRP by RHB total about RM0.38. At 10% discount, the “loss” to retail shareholders who did not subscribe is not more than 4 sen per share.
From the long run perspective, DRP is like a zero-sum game (ignoring fees), transferring wealth from a group of shareholders to another group. The trading activities by funds before and after DRP did not affect long term share price.
Yes, DRP is dilutive on per share basis. So are the effects of right issue, share distribution and employee share grants.
But DRP has very minimal to no impact on total return basis (i.e. after adding up all the dividends and extra shares gained from DRP, share distribution etc).
There are other factors responsible for the long-term share price under performance (again, measured on total return basis, not per share basis).

Posted by stkoay > 2023-06-12 19:56 | Report Abuse

Wow.....RHB has shareholders who are very knowledgeable .....
....come buy Maybank.....is now giving less DRP and also the discount rate is very much lower than RHB and CIMB.... :)

....I have all 3...but different amount :)

Posted by observatory > 2023-06-12 20:54 | Report Abuse

Since the introduction of Basel 3, a few years after the Global Financial Crisis, banks everywhere are required to hold more capital to reduce the risk of bank bailouts.
European banks were badly hit (they also had other problems). But Malaysian banks are not immune.
The direct impact can be seen on the lower Return on Equity (ROE) over the last decade.

Posted by observatory > 2023-06-12 20:55 | Report Abuse

ROE = net profit to shareholders/ average shareholders’ equity. As regulators demand more capital, the equity (denominator) increases, lowering the ROE which is a measure of profitability.
As ROE declines, price to book multiple also declines. Lower P/B leads to lower share price.

Posted by observatory > 2023-06-12 20:57 | Report Abuse

In RHB case, net profit to shareholders (the numerator) has actually increased from RM1.8b 2012 to 2.7b in 2022. However, shareholders’ equity (the denominator) has increased even more, from RM15b in 2012 to RM29b in 2022. The result is ROE of 13.4% in 2012 has declined to 9.7% in 2022.
A ROE of 9.7% is below RHB's cost of equity. So the price to book ratio is less than 1 time (currently below 0.8X)

Posted by observatory > 2023-06-12 20:59 | Report Abuse

But RHB is not alone. In fact, Public Bank has also performed poorly over the last decade as compared to the previous decade.
Based to Public Bank annual reports, net return on equity has declined from 24.1% in 2012 to 12.8% in 2022. As a result, price to book multiple has declined from 3.2X to 1.7X.

However, over the same 10-year period, return on average assets is almost unchanged, which is 1.9% in 2012, versus 1.8% in 2022 (so is return on risk weighted assets). Decline in profitability is mostly due to reduced leverage.

Posted by observatory > 2023-06-12 21:02 | Report Abuse

The hope is this deleveraging process may come to an end. RHB CET-1 ratio has increased from 10.4% as of 2012 to 16.9% in 2022. Any further increase is unlikely.
So RHB has started to give back more dividends to shareholders (since it cannot invest the excess capital in a profitable way, by earning above its cost of equity)
So hopefully, barring any disaster in Malaysian economy, the next 10 years will be better.

Posted by unicornbird > 2023-06-13 08:04 | Report Abuse

obs, are people still paying Public bank high price, because they are stuck with the old idea that it has high ROE of 20% ?

Posted by unicornbird > 2023-06-13 08:05 | Report Abuse

PBB's recent performance is not better than Maybank & RHB, but people are paying a premium for it.

Posted by observatory > 2023-06-13 09:30 | Report Abuse

ROE and P/B relationship can reveal the extent of bank premium/discount.
Public Bank still enjoys the highest P/B multiple, as it's the leader in ROE, and also in key indicators like cost to income ratio, gross impairment loan ratio, loan loss coverage ratio.

Posted by prudentinvestor > 2023-06-13 11:31 | Report Abuse

Eight Malaysian companies have been ranked among the world's top 2000 strongest companies this year by Forbes. Maybank is ranked top in Malaysia, followed by Public Bank, Tenaga, CIMB, Petronas Chemicals, RHB Bank, Hong Leong Finance and Air Asia X.

Posted by serbatipu > 2023-06-15 00:21 | Report Abuse

Pls go back to 5.70

Posted by prudentinvestor > 2023-06-15 09:24 | Report Abuse

Yes, yes, yes. That is its rightful position, at above RM5.70 a share.

Posted by prudentinvestor > 2023-06-19 09:26 | Report Abuse

Continue to accumulate. Forbes could not have ranked RHB Bank as the 6th strongest company in Malaysia for no reason.

Posted by bingoman > 2023-06-19 09:31 | Report Abuse

buy pbbank or rhbbank which better?

Posted by prudentinvestor > 2023-06-19 15:45 | Report Abuse

If your sole purpose of buying share is to get dividends, buy RHB Bank.

Posted by unicornbird > 2023-06-19 17:48 | Report Abuse

prudent, ask people to sell. I want to buy cheap

Posted by prudentinvestor > 2023-06-19 20:15 | Report Abuse

Assuming that this year's earnings per share remains stagnant at 65 sen and dividend stays at 40 sen a share, RHB Bank is then trading at a PE of 8.23 and a dividend yield of 7.48. You can't find another counter listed on Bursa with such a low PE and high dividend yield.

Posted by lummy711 > 2023-06-20 12:56 | Report Abuse

for me I'm long term. only want dividend. so the important indicator is Yeild on Cost am I right? Assuming the company don't reduce dividend too much. I cannot keep up with share price.

Posted by prudentinvestor > 2023-06-20 15:22 | Report Abuse

Since you are a long term investor and you only want dividend, it is the right time to buy Maybank (dividend yield 6.7%) and RHB Bank (dividend yield 7.4%).

Posted by prudentinvestor > 2023-06-21 16:40 | Report Abuse

RHB Bank wins hands down for being the worst performing bank counter over the last few days.

Posted by OnTime > 2023-06-22 09:20 | Report Abuse

hope it'll play catchup

Posted by troy88 > 2023-06-22 09:33 | Report Abuse

please come down to 5.30 again. I haven't bought enough haha

Posted by prudentinvestor > 2023-06-22 11:48 | Report Abuse

Opportunity strikes but once. RHB Bank has gained little from its recent low, only 13 sen but CIMB has gone up by almost 50 sen.

Posted by cwc1981 > 2023-06-22 18:28 | Report Abuse

RHB going to merger with ambank?

Posted by cn21 > 2023-06-22 21:01 | Report Abuse

券商:时机已成熟 大马银行再引并购兴趣RHB going to merger with ambank?
https://www.enanyang.my/%E8%B4%A2%E7%BB%8F%E6%96%B0%E9%97%BB/%E5%88%B8%E5%95%86%E6%97%B6%E6%9C%BA%E5%B7%B2%E6%88%90%E7%86%9F-%E5%A4%A7%E9%A9%AC%E9%93%B6%E8%A1%8C%E5%86%8D%E5%BC%95%E5%B9%B6%E8%B4%AD%E5%85%B4%E8%B6%A3?fbclid=IwAR3LYo3KEl8P1bYaoRZu0fviBqWqzUsnlVHlZlAiGcQpwKoR4Tl3c73__4E

Posted by prudentinvestor > 2023-06-22 21:24 | Report Abuse

Merging with another bank is not attractive enough. Better to be taken over by a bigger bank like Maybank.

Posted by i3gambler > 2023-06-23 07:43 | Report Abuse

If Maybank were to take over RHB, not likely to have so much cash to pay for it, most probably pay by issueing new Maybank shares to RHB shareholders, so take over = merger in this case.

Posted by speakup > 2023-06-23 07:58 | Report Abuse

IMO, Maybank already undisputed #1 in Malaysia, very little incentive to buy Rhb.
On the contrary, Rhb buy Ambank makes sense, to get bigger!

Posted by lpalani49 > 2023-06-23 11:33 | Report Abuse

in the RHB take over AMBANK secenario, is it better to be RHB share holder or ABank? in terms of share capital appreciation

Posted by prudentinvestor > 2023-06-23 11:37 | Report Abuse

I don't think Maybank is content with being the #1 in Malaysia. UOB, the smallest of the three big Singapore banks, is still much bigger than Maybank.

Posted by stkoay > 2023-06-26 19:51 | Report Abuse

https://theedgemalaysia.com/node/672586

The research outfit’s top picks from the banking sector are RHB Bank Bhd (8.0% in FY2023) and Malayan Banking Bhd (7.1% in FY2023).

Posted by success2628 > 2023-06-27 16:04 |

Post removed.Why?

Posted by Value Investor Coo1eo > 2023-06-27 21:49 | Report Abuse

@success2628 is what I call a syndicate.

Posted by prudentinvestor > 2023-06-28 10:25 | Report Abuse

@success2628 KLCI won't break above 1,800 points any time soon, certainly not this year or next. RHB Bank's share price is still 30% higher than its lows reached in early Nov 2020, excluding dividends. Get your facts right please.

Posted by success2628 > 2023-07-02 09:53 | Report Abuse

Super Good news !
More & more companies rushing to be listed into KLSE !
There are 6 companies going to be listed in KLSE for July & early August 2023 ! 


1)Skyworld 10-7-2023 0.80

2)DC Healthcare 17-7-2023 0.25

3)MSTGOFT 20-7-2023 0.81

4)MYMBN 25-7-2023 0.21

5)Daythree 26-7-2023 0.30
6)KGW 1-8-2023 0.21

Posted by bingoman > 2023-07-06 14:22 | Report Abuse

every month also RM 5.40+-

Posted by happybuying > 2023-07-06 16:06 | Report Abuse

boring RHB...stagnant

Posted by prudentinvestor > 2023-07-07 09:13 | Report Abuse

Foreign selling was responsible for RHB Bank's poor performance during the first half of the year. Long term investors shouldn't worry.

Posted by ikanbiliskering > 2023-07-07 09:26 | Report Abuse

really boring...

Posted by prudentinvestor > 2023-07-07 10:33 | Report Abuse

Pick up its shares when it is really boring and slowly dispose them of when it becomes interesting.

Posted by unicornbird > 2023-07-11 09:29 | Report Abuse

prudent why waste so much energy to prop up the share price
you should let it fall & collect more

Posted by prudentinvestor > 2023-07-12 10:30 | Report Abuse

RHB Bank is now trading at really attractive prices. Collect when nobody wants to buy and sell slowly when there is a stampede to buy.

Posted by prudentinvestor > 2023-07-12 12:31 | Report Abuse

Without foreign selling, we won't have the opportunity to buy RHB Bank at below RM5.50 a share. Just buy without hesitation.

Posted by unicornbird > 2023-07-12 13:23 | Report Abuse

many Bursa shares are very cheap now. good time to collect
some even cheaper than pre-covid price.
If Fed raise rate again, more discount coming. stay tuned

Posted by prudentinvestor > 2023-07-12 15:13 | Report Abuse

Based on its earnings and dividend payout for the last two years, RHB Bank should be trading at well over RM6 a share instead of under RM5.50 a share.

Posted by unicornbird > 2023-07-13 10:16 | Report Abuse

I prefer it to go $4

Posted by troy88 > 2023-07-13 10:20 | Report Abuse

slowly climbing back up..