Syarikat Takaful rises 3.79% after Affin Hwang starts coverage

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KUALA LUMPUR (March 21): Shares in Syarikat Takaful Malaysia Keluarga Bhd (STMK) rose 3.79% at mid-morning today after Affin Hwang Capital Research initiated coverage on the stock at RM4.48 with a "buy" rating and target price of RM8.30.

The research house also said STMK will likely deliver robust ROEs of 32-33% over 2019E-21E on the back of sale of credit-related products, which have a relatively low claims ratio, increasing market awareness of Takaful products, growth of Islamic banking and electronic initiatives.

At 10.21am, STMK rose 17 sen to RM4.65, with 376,800 shares traded.

In a note today, the research house said a low capex requirement also suggests the potential for special dividend payments ahead.

"We initiate coverage on STMK with a Buy rating and a target price of RM8.30 (at a 5.6x P/BV target)," it said.