Maybank may have broken above its downtrend line

Maybank share price has been sold down pretty badly over the past 6 months. From a high of RM10.56 in January, the share price has dropped to a recent low of RM6.85 (on July 4th). The sharp selldown was probably aggravated by its recent aggressive regional expansion program, where it spent a total of RM11.9 billion to acquire a 56%-stake in Bank Internasional Indonesia (at a cost of RM8.6 billion); a 15%-stake in An Binh Commercial Joint Stock Bank, Vietnam (at a cost of RM430 million); and a 20%-stake in a MCB Bank, Pakistan (at a cost of RM2.9 billion). The timing of this news couldn't be worse, as fund managers were reducing their positions in financial stocks globally, in reaction to the huge losses suffered by investment banks & financial intermediaries on Wall Street.

From the chart below, we can see that Maybank may have broken above its downtrend line at the RM7.10 level. This breakout is however not accompanied by increased volume.


Chart : Maybank's daily chart as at July 10th (source: Quickcharts)

The last 8-quarters' results are appended below. Maybank (closed at RM7.10 yesterday) is now trading at a trailing PE of 12 times (based on estimated EPS of 60 sen) or at a P/Book of 1.75 times (based on NTA per share of RM4.05 as at 31/3/2008). At these multiples, Maybank is deemed very attractive.



For more on Maybank, check out ECM's report recommending a BUY on this stock, as reported in the Edge Daily (go here) as well as a report in FinanceAsia.com, where Maybank makes a case for its aggressive regional expansion (go here).