If BNM likes to see more merger into giant entity for the local market and competing regionally. The most likely remaining target for M&A should be Affin and AFG in term of size and relevancy. Unlike Aeon Credit where there is a co-survive focus market due to Aeon Co and motorcycles industry.
With Affin taken over Hwang DBS in the recent M&A exercise. We believe it will be challenging to immediately take on another M&A in near term. However, this create a good chance for accumulation. In term of market price and its NTA. Affin has an edge over AFG on pricing if base on the 1.75 book ratio suggested by market analysts.
With a M&A potentially 6 months to 12 months ahead (if). We believe now Affin should have a target of at least RM 5.00 base on 1.75 times of book ratio. We did not go for its right issue at that time due to our view of over price on Hwang DBS. But with the wave of financial M&A triggered again. We will add on back Affin in months to come.