Hong Leong Bank +3.7%; Affin Keeps At Buy

Hong Leong Bank (5819.KU) is up 3.7% at MYR11.92; this after the company says, in an exchange filing late Tuesday, that nine-month ended March 31 net profit was up 22% on-year at MYR838.3 million. The company also says it plans to upsize its upcoming rights issue by MYR1 billion up to MYR2.6 billion for working capital and general corporate purposes. Affin Investment says the company's results are within expectations; "presently, we still keep our earnings forecasts for FY11 unchanged as we believe that the earnings momentum in 4Q FY11 should continue to stay robust, based on the HLB's aggressive market penetration in the SME and business enterprise segments." It also says, subsequent to the enlarged rights issue, the core capital ratios of HLB Group and the bank will improve 70 bps to 12.8% and 11.5% respectively post-merger with EON Capital (5266.KU). Affin keeps a Buy call and its MYR12.50 target.