Kenanga cuts Public Bank to Market Perform

KUALA LUMPUR, Jan 23 – Kenanga Research cut its rating on the country’s third-largest lender Public Bank Bhd to ‘market perform’ from ‘outperform’, citing a limited trading upside due to a 19 per cent surge in share price since June 2012.

“As the market has now priced in the growth potential and its share price is already trading at the historical premium to the average of its big-cap peers’ valuation, the stock now appears less attractive at this juncture,” Kenanga said in a note on Wednesday.

The research house said Public Bank was currently trading at a 10 per cent premium to the average of its big-cap peers Malayan Banking Bhd and CIMB Group Holdings Bhd.

Kenanga added that Public Bank would likely notch a single digit quarter-on-quarter revenue growth between 2 and 5 per cent in its fourth quarter earnings report due at the end of January.

Kenanga also kept Public Bank’s target price of 16.80 ringgit.

Shares in Public Bank inched up 0.13 per cent against the Malaysian benchmark stock index’s 0.3 per cent gain. – Reuters