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=MARKET BUZZ: UOB Raises Malaysia's Public Bank Call To Buy; Ups TP

KUALA LUMPUR (Jun 22) -- UOB Kay Hian Securities upgrades Public Bank to Buy with a higher target price of MYR25.20. Bank likely to be prime beneficiary of the new government’s policies of raising disposable income and private sector growth over the longer term, given its consumer and SME-centric loans base, house says in investor note. Shares now +1.6% at MYR22.98 "Greater earnings resilience amid the current uncertainty should warrant a larger valuation premium gap to peers," says house. Public Bank’s construction and government related loans constitute merely 2% and 0.4% respectively, placing it in a better position to contain potential lumpy non-performing loan risk emanating from the review or cancellation of infrastructure projects, says house. "Current valuation of 14.9x PE is close to -1 SD (standard deviation) below its 5-year historical mean PE of 14.4x," adds house.

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