Wednesday, April 30, 2008

Maybank to test its recent low of RM8.00

Another bluechip that is facing strong selling pressure is Maybank. The stock may test its recent low of RM8.00 soon. If this psychological level is violated, the next horizontal support is at RM7.70. On a rebound, Maybank will encounter resistance from its medium-term downtrend line at RM8.45 & horizontal resistance at RM8.80.

Maybank is facing some uncertainties on two fronts. Firstly, it will have a new CEO on May 2nd, when Abdul Wahid Omar (currently the CEO of TM) will join Maybank. Wahid, who will be replacing Amirsham Aziz, will inherit some oversea acquisitions, such as Bank International Indonesia, which were initiated by his predecessor. Some of these acquisitions were made at prices which some analysts find to be on the high side, given the drop in bank valuation worldwide in the face of global economic slowdown & current on-going financial crisis in the US. So, the second problem is how Maybank will grow in this challenging environment?


Chart 1: Maybank's daily chart as at April 29, 2008 (courtesy of Quickcharts)


Chart 2: Maybank's monthly chart as at April 29, 2008 (courtesy of Quickcharts)

(For more on the challenges that Wahid will face in Maybank, you can read this article in the recent issue of the Edge).
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2 comments:

  1. sangkancilWednesday, April 30, 2008 10:41:00 PM

    hi..big sifu...
    i m also looking intothis two share..
    maybank and tenaga..
    wat do u thi nk regarding its intrinsic value?

    shud head south in the short and medium term..

    too many report ask to avoid such stock....

    ReplyDelete
  2. Alex LuFriday, May 02, 2008 9:57:00 AM

    It is hard to put a fair value on Tenaga. It is likely not to get any help from the Government in term of a raise in the tariff rate, despite operating in a high cost environment.

    Maybank has an earning of 60 sen per share for FY2007. At Wednesday's closing price of RM8.00, it is trading at a PE of 13.3 times. If you valued it at a PE of 15 times, Maybank's fair value is about RM9.00.

    If you compared the performance of Maybank with Commerce & PBBank (latest 4 quarters vs. preceding 4 quarters), we can see that Maybank has been lagging behind. Using the unaudited results for 31/12/2007, we can see that Commerce's net profit increased by 86% while turnover grew by 41%. PBBank's net profit increased by 23% while turnover increased by 24%. Maybank's net profit increased by 16% while turnover increased by 18%. From this, you can see that Maybank needs to do more to catch up. Is Wahid up to this challenge? We will have to wait & see.

    ReplyDelete