BIMB dragged by LTH’s problems
Prathab V | 28 Dec 2018 00:30
With the on-going financial travails at Lembaga Tabung Haji (LTH), investors’ attention temporarily shifted to its 53.47% listed subsidiary, BIMB Holdings Bhd. As a result, nervous investors dumped BIMB’s shares, thinking that the counter may also be dragged down by LTH. But it was obviously a knee- jerk reaction.
BIMB is seen as a proxy of investors’ sentiment towards the pilgrim fund. “Recent share price volatility as a result of negative sentiment surrounding its major shareholder is unwarranted, in our view, given that BIMB’s fundamentals remain unchanged,” wrote RHB Investment Bank Research in a Dec 13 report. The research house is advocating that investors ignore the noise as a result of LTH and buy BIMB, while maintaining its earlier target price of RM4.86. BIMB closed at RM3.60 on Dec 20.
Sentiments on LTH and its deal involving a land purchase from the 1Malaysia Development Bhd (1MDB) received much criti- cism. In 2015, LTH purchased a 1.56-acre plot in Tun Razak Exchange (TRX) from 1MDB for RM188.5 mil. However, with the new Pakatan Harapan govern- ment, the deal will be scrutinised closely. Though the deal largely focused on LTH, unfortunately BIMB has faced the brunt of investors’ poor confidence in the counter.
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