AMMB Holdings Berhad : AmBank Issues Eight New Call Warrants

Press Release

4 January 2012

AmBank Issues Eight New Call Warrants

AmBank (M) Berhad ("AmBank") is issuing eight new European style cash- settled structured warrants to meet investor demand as Malaysian investors bid farewell to a tumultuous 2011 and look forward to a new trading year. For AmBank's upcoming issuance, there will be eight call warrants ("CW") over the ordinary shares of Genting Berhad ("GENTING"), Genting Malaysia Berhad
("GENM"), Malaysia Building Society Berhad ("MBSB"), IGB Corporation Berhad
("IGB"), KrisAssets Holdings Berhad ("KASSETS"), OSK Holdings Berhad
("OSK"), Proton Holdings Berhad ("PROTON") and Oriental Holdings Berhad
("ORIENT"). The structured warrants will have tenures of approximately seven months and will be listed on 5 January 2012 with issue size of up to 100 million each.
"We welcome a new, and hopefully better, trading year with AmBank's latest tranche of structured warrants. It was a difficult and volatile second half in 2011 as global markets were roiled by the sovereign debt crisis in Europe and fears of the US and Emerging Markets economic slowdown. With the exception of a Budget-themed tranche in October, we had refrained from warrant issuances since end-July as the macro events unfolding posed too much downside risk for our investors. Those seeking to trade the volatility were advised to look at existing issues that had been battered down. However, with clarity returning to the markets on the back of firm and cohesive policy action from European leaders coupled with recent positive economic data out of the US and early signs of monetary policy loosening by the Chinese, 2012 may turn out to be a better year for investors. The Malaysian stock market is far more resilient than most,
recovering from a drop of 12% to close up 0.8% for 2011 versus a drop of 19%

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for the MSCI ex Japan. For 2012, the much anticipated upcoming General Elections and mega-IPOs of Felda Global Ventures and Integrated Healthcare are expected to keep the interest in the Malaysian equity markets buoyant. However, ongoing global event risk should not be discounted and the focus of investors should be on domestic corporate activity. Therefore, AmBank is issuing
8 new call warrants on GENTING, GENM, MBSB, IGB, KASSETS, OSK, PROTON and ORIENT for its first tranche of 2012, in line with our objective to continuously introduce new trading alternatives for the market. In addition, our call warrants on KASSETS, ORIENT and OSK will be the first structured warrants to be issued off the respective companies," said Ms Ng Ee Fang, Director/Head, Equity Derivatives, AmInvestment Bank Berhad.
Both GENTING and GENM remain top investment picks for Malaysian institutional and retail investors due to their strong brand name and excellent management track record. The group is building a strong global brand with casino operations in Singapore, US and the UK besides Malaysia. For parent company GENTING, casino operations at its Singapore subsidiary, Genting Singapore, contributed
59% of 9MFY11 EBITDA while most of the balance came from its Malaysian
operations. Moving forward, GENTING and GENM are establishing global casino operations under the Resorts World brand name. Resorts World New York was recently launched at the end of October 2011 adding to the Resorts World Sentosa in Singapore. Resorts World at the NEC in Birmingham, UK is planned for 2014 and Resorts World Miami after that. GENM has unveiled an ambitious USD3 billion masterplan for the Resorts World Miami project in Florida. As the casino bill to award casino licenses in South Florida is due to be debated by the legislature over these two months, the success of GENM in securing a license would provide a significant boost to GENM and GENTING. AmBank's CWs on GENTING and GENM are priced at 15 sen each with gearing of 7.08 and 5.07 times respectively.
Financial institution MBSB reported strong earnings and loans growth in its latest earnings results. For 3QFY11 (ended 30 September), it posted a sharp 21.5% QoQ jump in net earnings while overall loans grew at an annualised rate of 30%. In a recent interview, MBSB's chief executive officer, Datuk Ahmad Zaini Othman
was confident on MBSB hitting the RM500 million pre-tax profit target by 2012,

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way ahead of 2015 as originally planned. MBSB's assets have doubled to RM17.8 billion while non-performing loans have been reduced significantly to 11 per cent from 23 per cent over the past three years. For 2012, MBSB is planning to launch hire-purchase facilities for the private and government sectors as well as credit cards for civil servants. On the longer-term, MBSB has set a target to rebalance its loans portfolio to a more balanced one-third contribution from each of its three major segments, i.e. personal financing, corporate and mortgage, over the next 12 to 18 months. Currently, the personal loans segment constitutes 45% of total loans, mortgage at 32% and the corporate segment at
23%. AmBank's CW on MBSB is priced at 15 sen with gearing of 4.18 times.
Diversified conglomerate ORIENT is involved in various businesses and industries. It started out in the automotive sector but has since diversified into plantations, financial services and property investment both in Malaysia and abroad. ORIENT currently has a plantation landbank of 81,000 ha with the plantation unit being the largest profit generator, contributing almost half of total pre-tax profit of RM316 million for 9MFY11 (ended 30 September). As for its property investments, ORIENT owns offices and apartments in Australia and recently expanded into Thailand via the purchase of a serviced apartment block in Bangkok. Moving forward, ORIENT is diversifying into healthcare by building a hospital in Klebang, Melaka. The hospital is estimated to cost RM250 million and expected to be completed by 2014. ORIENT also sits on a large cash pile of RM2 billion. AmBank's CW on ORIENT is priced at 15 sen with gearing of 5.87 times.
OSK has caught the headlines recently on the merger talks between OSK's investment banking unit and RHB Capital Berhad. Details on the merger proposal are due to be submitted to Bank Negara soon with the deal expected to be finalized by March. The proposed merger will enable RHBCAP to leverage on OSK's regional investment banking operations. It will also boost the merged entity's market share of traded volume on the local bourse significantly at an estimated market share of 15% compared to CIMB's current top position of about 10%. As for the potential acquisition price, it is touted to be between 1.9x to 2.2x book value and could involve a share swap. AmBank's CW on OSK is
priced at 15 sen with gearing of 5.80 times.

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National carmaker PROTON is another stock that has caught investors' interest in recent weeks on the back of the reported stake sale by Khazanah Nasional. Khazanah was reported to be looking to dispose of its 43% stake in PROTON with a number of potential suitors such as DRB-Hicom, UMW and Naza in the picture. As foreign carmakers like Peugeot and Volkswagen begin to assemble locally and seek to grow their market share in Malaysia and ASEAN aggressively, PROTON's various assets in the form of production capacity, R&D capabilities and distribution and after-sales network would be very attractive to these foreign marques. DRB-Hicom and Naza contract assemble for Volkswagen and Peugeot respectively. As for the potential offer price for PROTON, reports indicate it could be between RM6 to RM7 per share. AmBank's CW on PROTON is priced at 15 sen with gearing of 4.99 times.
IGB via 75%-owned KASSETS owns and operates both the highly successful retail malls of Mid Valley Megamall and The Gardens. With the completed acquisition of The Gardens mall by KASSETS from IGB, KASSETS net lettable area has increased significantly from 1.67 million sqft to 2.49 million sqft, turning it into one of Malaysia's largest retail space owner. Recent reports indicate that IGB and KASSETS are looking to structure a real estate investment trust (REIT) to benefit from the tax advantages of a REIT. The increased funds from a REIT exercise at KASSETS level would also allow IGB to go on a more aggressive expansion of its landbank for property development projects. Besides retail malls, IGB owns and operates the Boulevard Hotel and The Gardens Hotel in Mid Valley, Micasa All Suites as well as operates the Cititel and St Giles chain of hotels. AmBank's CWs on IGB and KASSETS are priced at 15 sen each with gearing of 7.70 and 5.06 times respectively.
This offer is aimed at sophisticated traders who want to trade on the direction and volatility of GENTING, GENM, MBSB, ORIENT, OSK, PROTON, IGB and KASSETS. The new CWs have gearings ranging between 4.18 and 7.70 and are targeted at investors who want leveraged exposure to the underlying counters.

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About AmBank Group

Established in August 1975, AmBank Group is one of the largest banking groups in Malaysia by market capitalisation and comprises AMMB Holdings Berhad and its subsidiaries AmInvestment Bank Berhad, AmInvestment Group Berhad, AmBank (M) Berhad, AmIslamic Bank Berhad, AmG Insurance Berhad and AmLife Insurance Berhad.

The Group provides a wide range of conventional and Islamic banking and financial solutions, including investment banking, commercial banking, corporate banking, retail banking as well as underwriting of life and general insurance.

Adding greater value to this one-stop financial hub is the Group's strategic partnership with the Australia and New Zealand Banking Group (ANZ), one of Australia's leading financial institutions, providing the synergy of a wide network, regional presence and international banking expertise.

For more information, please visit ambankgroup.com

For more information on call warrants, please visit our website www.amwarrants .com For general enquiries, please contact 03-9235 3388 or email to [e-mail] For media enquiries, please contact Ms Ng Ee Fang, Director/Head, Equity Derivatives, AmInvestment Bank Berhad at tel: [phone] or via email at

[e-mail]

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