Public Bank emerged the most profitable counter among 30 index-linked counters on Bursa Malaysia today following the announcement of the share bonus issue, yesterday.
As of 10am this morning, the banking group's shares jumped RM1.54 or 8.34% to RM20.00 with 9.29 million shares interchangeable and contributed 11.65 points on the FTSE Bursa Malaysia KLCI.
Yesterday, Public Bank announced the proposed issuance of up to 15.53 billion bonus shares based on four bonus shares per share for each existing shareholding.
Bernama reported that when the move is completed, its share capital will remain at RM9.41 billion but total shares will increase to 19.41 billion, a significant increase from the current 3.88 billion shares.
The move is expected to be completed by the first quarter of financial year 2021.
Meanwhile, MIDF Amanah Investment Bank Bhd in its research note today described the proposed bonus issue as something positive.
"Apart from rewarding its shareholders, we also think this move will increase the liquidity and affordability aspects of the shares.
"In fact, based on the consistent performance of the banking group, regardless of the contingency, we expect this will also add to the attractiveness of stocks in the eyes of investors," said the research firm.
As a result, the firm maintained a 'buy' recommendation on Public Bank shares with a fixed target price of RM20.50.
