Maybank Kim Eng Securities initiated coverage of Kiatnakin Bank Pcl with a buy rating and a price target of 41 baht ($1.29), citing an improved outlook for the small sized bank following a merger with Phatra Capital Pcl.

Kiatnakin shares rose 0.8 percent to 33.25 baht by 0904 GMT. They have gained 3.9 percent this year to Thursday, underperforming a 11.2 percent gain of the broader market .

"We are positive on the Kiatnakin and Phatra merger with expected high business synergy. This will help boost earnings growth and raise long-term profitability," the broker said in a report.

"The current share price is undemanding at 0.86 times price to book value and 7.5 times price to earnings, combined with a 6-8 percent dividend yield," Maybank Kim Eng said.

1605 (0905 GMT)

(Reporting by Viparat Jantraprap in Bangkok; viparat.jantraprapaweth@thomsonreuters.com)