KUALA LUMPUR (Nov 11): Affin Bank Bhd, Farm Fresh Bhd, Lingkaran Trans Kota Holdings Bhd (Litrak), PMB Technology Bhd and Sam Engineering & Equipment (M) Bhd will be added to the MSCI Global Small Cap Index, Malaysia, following MSCI Inc's November 2022 semi-annual index review.
Meanwhile, MSCI said Duopharma Biotech Bhd, Mah Sing Group Bhd, Mi Technovation Bhd, Sunway Bhd, Sunway Construction Group Bhd and YTL Hospitality REIT will be removed from the index.
All constituent changes will take effect at the close of Nov 30, 2022, MSCI said in a statement on Thursday (Nov 10).
Affin Bank's share price has been on an upward trend since the start of the year. The banking stock climbed to RM2.29 — the highest level since June 2017. Year-to-date, Affin Bank's share price has risen 32% from RM1.73 at the end of December last year. It is valued at a price-to-book ratio of 0.48 times — the lowest among the local banks listed on Bursa Malaysia.
According to Bloomberg, among seven analysts who track Affin Bank, six have a "buy" call on the stock, while one gives a "hold" recommendation, with an average 12-month target price of RM2.64. This implies an upside of 15% from its current closing price.
The bank has announced a single-tier special dividend of 18.09 sen per share following the divestment of a 63% stake it owned in Affin Hwang Asset Management Bhd to Starlight Asset Sdn Bhd, an investment holding company incorporated by funds managed by CVC Capital Partners.
The total special dividend amounts to RM400.2 million, about 28.23% of the total proceeds of RM1.42 billion from the divestment.
Farm Fresh will also be added to the index, barely six months after it made its debut on Bursa Malaysia.
At Friday's closing of RM1.61, the dairy product maker's share price has gained 19.3% against its initial offering price of RM1.35.
Six analysts are recommending their clients to "buy" the dairy stock, while three have "hold" recommendations.
The 12-month average target price of RM1.89 represents a 17.4% increase from its last closing price, according to Bloomberg.
Interestingly, MSCI includes highway concessionaire Litrak, which will be taken private after its asset sales.
For shareholders of Litrak, they are expected to be rewarded with bumper dividends following the company's completion of the disposal of its two highway concessionaires to Amanat Lebuhraya Rakyat Bhd for RM4.48 billion. It has declared a special dividend of RM4.57 per share, with an ex-date of Nov 10, to be payable on Nov 18.
Litrak, which is 43.2% owned by Gamuda Bhd, said it has received total proceeds of RM2.28 billion for Litrak Sdn Bhd and RM459 million for a 50% stake in Sprint, for a sum of RM2.74 billion.
Litrak does not plan to retain its listing status, following the sale of the highway concessionaires. It is also proposing a capital repayment of around 52 sen per share, according to its circular to shareholders in July.
Despite the cautious market sentiment, metallic silicon and aluminium manufacturer PMB Technology's share price has fared well. The stock has surged a whopping 70% year to date to RM4.25 on Friday from RM2.50 on Dec 31, 2021. The company completed a four-for-one bonus share issue recently.
Similarly, Sam Engineering also undertook a bonus issue on the basis of three new shares for every share held in January. The stock was on a downtrend in the first half of the year, falling to a low of RM2.77 in mid-July from this year's peak of RM6.15. It rebounded to the trough to RM5.59 on Friday.
SAM Engineering is involved in providing precision machining, equipment integration and automation solutions to aerospace and equipment industries.