Maybank jumps on analysts' stock upgrade

Malayan Banking Bhd's (Maybank) (1155)stock got a boost yesterday as analysts raised their target prices after the lender reported record earnings

The stock rose to an intra-day high of RM8.40 before closing lower at RM8.14, its highest close in 28 months. It closed 1 sen higher from the previous trading day.

At least two research firms, Kenanga Research and TA Securities, upgraded the stock after Maybank turned in an over fivefold increase in net profit to RM3.8 billion for the year to June 30.

RHB Research raised its fair value for the stock by 2 per cent to RM9.86 while ECM Libra Research lifted its target by about 9 per cent to RM9.81.

"In our view, valuations remain decent with strong organic growth expected from the domestic operations as well as Bank Internasional Indonesia (BII). Hence, the negative impact from the expensive acquisitions of BII and Pakistan's MCB Bank would be more than nullified with (2011 earnings) expected to exceed pre-acquisition levels," RHB said in a note to clients yesterday. It maintained an "outperform" call on the stock.