Stock With Momentum: BIMB Holdings

This article first appeared in The Edge Financial Daily, on February 19, 2019.
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BIMB Holdings Bhd (-ve)
Trading of shares in BIMB Holdings Bhd (fundamental: 2.1/3; valuation: 3/3) is another stock that triggered our stocks with momentum algorithm yesterday for the first time this year.

The banking group’s share price increased five sen or 1.2% to RM4.23 yesterday, with 1.64 million shares done. The trading is substantially higher compared with its 200-day average of 192,094 shares.

On Dec 12, BIMB said it had made an early partial redemption of RM609.94 million of a 10-year RM1.66 billion sukuk, which was issued at a discount and fully subscribed by its controlling shareholder Lembaga Tabung Haji.

Based on its current cash flow position, BIMB said it has sufficient funds to make an early partial redemption under the sukuk.

BIMB said the early partial redemption exercise will reduce the group’s future payment obligations under the sukuk and is expected to have a positive impact on its future earnings. The maturity date of the sukuk is Dec 12, 2023.

BIMB is currently trading at 1.4 times its net book value.