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Macquarie initiated coverage on Public Bank Bhd (OTC:PBLOF) with an outperform rating and a price target of MYR5.26, according to a research note released Tuesday.
The Malaysian banking institution’s stock received a positive outlook despite concerns about net interest margin compression, which Macquarie described as "an immediate but manageable issue" for the bank.
Macquarie dismissed worries about Public Bank’s information technology spending as "overblown" and suggested that a potential selldown by the founding family presents opportunities for investors to accumulate shares.
The research firm noted that Public Bank’s valuations appear "fairly priced on traditional PB/ROE metrics" but currently undervalue the bank’s resilience in the market.
Public Bank was designated as Macquarie’s "top pick among Malaysian banks" due to its demonstrated resilience amid what the firm characterized as an uncertain economic environment.
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