Opportunistic Pick

Following the merger story between CIMB and RHB, from back-of-envelop calculation, current price of CIMB appears to be undervalued. Based on our calculation, NAV per share of the combined entity should be about $4.53. The current average P/NAV for all banks is about 1.6x. The fair value (NAV x average P/NAV) works out to be about $7.25. At current price of $5.90, we believe that the upside is there. Our updated portfolio as follows:

 

portfolio 20 nov 14

 

Not much performance. But is too early to judge. We also do not expect profit to come in so early. Don't forget that this is a long term investment strategy! To a certain extent, such performance is not beyond expectation. This is the reason why we are very cautious in placing in the funds... so far only 36% invested.... Patience is key... return will come 🙂