The shares closed 28 sen or 5.8 per cent lower to RM4.54, its lowest level since April 16 1999.

Maybank had on Thursday fixed its rights shares at RM2.74 each, which is a 34 per cent discount from the theoretical ex-rights price of RM4.17.

It was also 43 per cent lower than Maybank's closing price on Thursday.

The price nevertheless came in within analysts' expectations of between RM2.59 and RM3.14.

AmResearch analyst Fiona Leong said the rights offer would dilute Maybank's projected 2010 earnings per share by 27 per cent to 38 sen.

It would also dilute the bank's book value this fiscal year by 11 per cent to RM4.01 share.

She maintained a "sell" recommendation on the stock, with a target price of RM4.40, or an ex-rights target of RM3.90.

Analysts said it was necessary for Maybank to raise the RM6 billion to strengthen its capital base as it had chalked up RM9 billion worth of debt over the last few months, following expensive bank acquisitions in Indonesia and Pakistan.

"While we acknowledge management's intent of strengthening its capital base for its strategic transformation and organic growth purposes, we are a little less excited about the timing of the issue," ECM Libra said in a report yesterday.

Analysts see the rights issue as a virtually done deal as its two largest shareholders have given an undertaking to take up 89.4 per cent of it.

Assuming a full take-up, Maybank's Tier 1 core capital ratio will increase from 8.1 per cent as at end-December to an estimated 11 per cent, which is the highest among Malaysian banks.

HwangDBS Vickers Research said that despite the stronger capital base, it remains concerned on Maybank's ability to consolidate the recent bank purchases and on further impairments it may have to make, especially for Bank Internasional Indonesia (BII) and MCB Bank in Pakistan.

It noted that BII is currently trading at 41 per cent below the tender offer price of Rp510 a share, while MCB's market price is 70 per cent lower than the acquired price.

OSK Research's Keith Wee said Maybank is likely to preserve a large portion of its capital to pre-empt the potential of rising impairment and loan loss provision, especially if the current economic downturn lasts longer than expected.

He retained his dividend payout assumption of 40 per cent. He has a neutral call on Maybank, but lowered its target to RM4.30 (ex-rights: RM3.80).