OSK Starts Alliance Financial Group At Buy

 OSK Research initiates Alliance Financial Group (2488.KU) at Buy with a price target of MYR3.80. "Being the smallest local bank in Malaysia, AFGB has successfully created its niche in the consumer and SME segments," the house says. It adds, the bank will also propel non-interest income growth by increasing fee-based income through the cross-selling of wealth management and bancassurance products. "We believe the growing loans base in niche segments, expansion in non-interest income, prudent cost control and stronger NIMs arising from a potential OPR hike will heighten the group's earnings," the house says. It adds, as a small player, it is a "rather attractive merger and acquisition target" for foreign players, which will possibly re-rate the stock upward. The stock is down 1.3% at MYR3.02.