Shares of AEON Credit Service (M) saw a surge in value on Monday morning following the announcement of a plan to issue bonus shares to its shareholders. The Malaysian financial-service company witnessed a significant jump of 6.5%, and currently stands as 5.6% higher at 11.98 ringgit ($2.65), succeeding in reducing 12-month losses to 12%.
In a recent filing made on Friday, AEON Credit proposed the issuance of 255.3 million new shares, offering one bonus share for every existing share held on a date that will be determined in due course. This measure has been implemented as a way to reward existing shareholders.
The company assured that this proposed issuance will not impact the total value of its issued share capital, which currently stands at MYR584.0 million.
AEON Credit anticipates the completion of this issuance during the fourth quarter.
According to Kenanga Investment Bank, this move by AEON Credit is perceived as a positive step overall. The bank noted that the company has previously carried out similar exercises approximately every five to six years, which have proven to have a positive effect on its share price.
“We believe the overall exercise would be beneficial for the stock as the halving of its share price could make it more palatable for retail participation,” explained Kenanga analyst Clement Chua in a note.
Kenanga Investment Bank maintains an outperform rating on AEON Credit and has decided to keep its target price unchanged at MYR16.15.