AFFIN - An Opportunity?

AFFIN (5185)
Finance Sector


This is the recent evaluation by IB on this counter.

Date	Open Price	Target Price	Upside/Downside	Price Call	IB
07/09/2012	3.41	4.3	+0.89 (26.10%)	BUY	KENANGA
04/09/2012	3.47	4.3	+0.83 (23.92%)	BUY	KENANGA
03/09/2012	3.48	3.5	+0.02 (0.57%)	HOLD	RHB
03/09/2012	3.48	2.82	-0.66 (18.97%)	SELL	CIMB
23/08/2012	3.55	2.96	-0.59 (16.62%)	SELL	HLG

Quoted from KENANGA

"AFFIN announced that BNM has granted it approval to start negotiation with DRB Hicom to acquire an equity stake in Bank Muamalat. This could lead to a rerating of AFFIN. We think its current valuation at a 20% discount to its Book Value is still undemanding.  We rate AFFIN as an OUTPERFORM with a TP of RM4.30"

"While we are optimistic about this acquisition, we also see hurdle for the deal to go through."

"This is because BNM may not allow AFFIN to have an ownership of two Islamic Banking licenses, namely, 100%-AFFIN Islamic Bank and a potential 70% equity stake in BMMB, without merging both entities.  As such, approval of BNM could be a hurdle for the deal to go through."

Chart information

1) Currently closed at RM3.44 inline with the resistance level.
2) As of today chart (21/9), PSAR formed a bullish sign.
3) Stochastic and William is developing and heading toward 80%.
4) RSI- strength getting higher, money flow should be good as well.
5) CCI - interesting to me. Should keep on going and create a positive mountain soon..
6) TP - next price resistance at RM3.51 / RM3.57

In short term, should be able to gain profit based on these TPs with CWs.