MNRB: Washed out by the Great Flood?

Results Update

For QE31/12/2014, MNRB incurred a net loss of RM20 million due to mainly the provision for Peninsular Malaysia Flood losses recognised during the current quarter which affected the results of the Company's reinsurance and retakaful subsidiaries


Table 1: MNRB's last 8 quarterly results


Chart 1: MNRB's last 32 quarterly results

Valuation

MNRB (closed at RM3.90 yesterday) is now trading at a PE of 6.7 times (based on last 4 quarters' EPS of 58.40 sen). Its Price to Book is at 0.66 time (based on NTA of RM5.86 as at 31/12/2014). At these multiples, MNRB is deemed fairly attractive.

Technical Outlook

MNRB has been trading within a irregular band (see the chart below). Its failure to break above that band could lead to further correction ahead. If the market sentiment weakens and its financial performance deteriorates, its share price could revisit the lower band in the future. 


Chart 2: MNRB's monthly chart as at Feb 17, 2015 (Source: ShareInvestor.com)

Conclusion

Based on above, I think it is advisable to reduce our position in this stock.

Note:
In addition to the disclaimer in the preamble to my blog, I hereby confirm that I do not have any relevant interest in, or any interest in the acquisition or disposal of, MNRB.