SO, AMMB Holdings Bhd did not fare too bad after all upon resumption of trading today.
Having been slapped with a RM2.83 bil penalty touted as “mother of all fines” in the 1Malaysia Development Bhd (1MDB) global settlement, the banking group only shed 11.08% or down 35 sen to RM2.81 amid a hefty volume of 71.87 million shares at the close of the morning session.
The stock was traded at an intra-day low of RM2.63 (at the beginning of trading) but started to pick up before touching an intra-day high of RM2.91. It closed at RM3.16 last Friday (Feb 26) prior to its two-day suspension on Monday (March 1) and yesterday (March 2).
CGS-CIMB Research is projecting a net loss of RM2.64 bil for AMMB in 4Q FY2021F in view of the provision of RM2.83 bil for the 1MDB settlement.
“Meanwhile, we are projecting a CNP (card not present transaction) of RM191.9 mil for AMMB in 4Q FY2021F, representing a decline of 22.5% year-on-year (yoy) (27.2% quarter-on-quarter),” opined analyst Winson Ng in AMMB’s results review.
“We believe the CNP decline would be due to a 44.3% yoy surge in 4Q FY2021F LLP (loan loss provision) as AMMB will continue to beef up its pre-emptive provisions for COVID-19 in 4Q FY2021F.”
All-in, the research house is projecting a net loss of RM1.77 bil and no dividends in FY2021F for AMMB due to the 1MDB settlement.
“We see these as de-rating catalysts that underpin our ‘reduce’ call for AMMB,” added CGS-CIMB Research.
On concerns expressed by minority shareholders that there might be some elements of insider trading by “top management staff” prior to the RM2.83 bil fine being meted out on AMMB, the Minority Shareholders Watch Group CEO Devanesan Evanson said at this point in time, such issue is “a mere allegation”.
“The Securities Commission (SC) will probably be looking out for abnormal or abrupt trading patterns by the insiders,” he told FocusM.
“The market regulator is likely to be interested in asking for the motivation and rationale for these trading patterns … we should let the regulator do their work.”
Devanesan further advised minority shareholders to read the bank’s media releases – as well as research analyst reports – in full.
“We are given to understand that the settlement with the Government is full and final in relation to the legacy issues,” he pointed out.
“There will be no dividends in the coming year and we are unsure when the company will be able to resume its usual dividend yield.”
He added: “On lifting of the suspension, the share price has dropped to accommodate the negative news. Obviously, there is no simplistic recommendation as to whether to buy, sell or stay invested. It would all depend on the minority shareholders risk appetite and how they view things.” – March 3, 2021