Affin Research maintains Reduce on CIMB

KUALA LUMPUR: Affin Research has maintained its Reduce call on CIMB Bank with a target price of RM7.05, premised on FY15E’s ROE of 12.3%, a cost of equity of 10% and a growth rate of 5%, which translates into a P/BV multiple of 1.45 times.

In a note on Thursday, the research house said CIMB’s share price outlook in the near term will remain subdued owing to selling pressure arising from the group’s involvement in the proposed merger with RHB Capital as well as creation of an Islamic Banking franchise with MBSB.