The Star Online: Business
The Star Online: Business |
- CIMB Research Neutral on Malaysian banks, sees earnings improving
- KLCI opened lower following overnight fall on Wall Street (updated)
- Trading ideas: CIMB, DRB-Hicom, Patimas, AirAsia, Benalec, Favelle Favco
| CIMB Research Neutral on Malaysian banks, sees earnings improving Posted: 11 Jun 2013 06:01 PM PDT KUALA LUMPUR: CIMB Equities Research expects Malaysian banks' core net profit growth should rebound in the coming quarters, from its lethargic 1.9% on-year expansion in 1Q13, with improving market and business sentiment after general elections. "But while loan growth and fee income should fare better, banks could remain dogged by: (1) lower net interest margins and (2) a continuous climb in their credit costs, which would limit the upside for earnings growth from our projected 9.9% for 2013," it said on Wednesday. The research house said based on these factors, it remained Neutral on the banking sector. However, its concerns are balanced out by the stable and strong asset quality of Malaysian banks. "We continue to identify some positives for the sector: (1) financing opportunities for projects under ETP; (2) undemanding P/Es averaging 11.9x for CY14; and (3) net dividend yields of about 3.9%," it said. CIMB Research projects net earnings growth of 9.9% for 2013, weaker than the 11.7% in 2012. This would be supported by an increase of 11.3% for net interest income and 18.9% increase for non-interest income. The research house said while topline growth would be jacked up by the consolidation of several acquisitions completed last year, consolidation could equally raise overheads by 10.1%. Loan loss provisioning is projected to jump by 72.9% in 2013, due to smaller write-backs / recoveries. |
| KLCI opened lower following overnight fall on Wall Street (updated) Posted: 11 Jun 2013 06:54 PM PDT KUALA LUMPUR: Malaysia's blue chips fell into the red as key regional markets slid for the second day as investors are cautious after the Asian market's volatile session on Tuesday. At 9.15am, the FBM KLCI fell 5.27 points to 1,774.30. Turnover was 90.79mil valued at RM65.47mil. Losers outpaced gainers at 181 to 67. 158 were unchanged. HwangDBS Vickers Research said It is going to be a test of resilience for Malaysian equities following an overnight fall on Wall Street, which saw its leading equity barometers slipping between 0.8% and 1.1%. Asian bourses are expected to remain under selling pressures ahead. "On the chart, in view of the jittery external backdrop, the key FBM KLCI could pull back a bit more today. Nevertheless, the benchmark index may face relatively limited downside risk as bargain hunters will likely step in on further market weaknesses," it said. Bloomberg reported Asian stocks fell for a second day, extending a global rout, as investors weighed growing reluctance by central banks to add more stimulus after the Bank of Japan left its lending program unchanged. Reuters said U.S. stocks slipped in a volatile session while European shares fell to six-weeks lows on Tuesday on concern that central bank support for markets was turning more cautious, as the BOJ's move came amid persistent speculation about the U.S. Federal Reserve toning down its strong stimulus later in the year. At Bursa Malaysia, Favco rose 12 sen to RM2.55 after securing a RM161mil contract to supply cranes, Aeon six sen to RM16.62. BAT lost 46 sen to RM62.14, Genting Bhd eight sen to RM10.42, Among Petronas-linked stocks, PetDag and PetGas each fell 16 sen to RM24.98 and RM20.90. Plantations were among the decliners with PPB down 16 sen to RM13.74, KL Kepong eight sen to RM21.62 and IOI six sen to RM5.36. Among banks, AMMB and CIMB rose four sen to RM7.37 and RM8.23 each but Hong Leong Bank fell 18 sen to RM13.90 and HLFG four sen to RM14.60. The ringgit strengthened against the dollar at 3.138 from the previous close of 3.15 Among the key regional markets: Japan's Nikkei 225 fell 2.05% to 13,045.13; Hong Kong's Hang Seng Index fell 1.20% to 21,354.66; Shanghai's Composite Index fell 1.33% to 2,210.90; Taiwan's Taiex fell 0.54% to 8,116.15; South Korea's Kospi fell 0.07% to 1,919.40 and Singapore's Straits Times Index fell 0.47% to 3,155.58. US light crude oil fell 54 cents to US$94.84 and Brent fell 33 cents to US$102.63 Spot gold fell 43 cents to US$1377.90 |
| Trading ideas: CIMB, DRB-Hicom, Patimas, AirAsia, Benalec, Favelle Favco Posted: 11 Jun 2013 05:45 PM PDT KUALA LUMPUR: JF Apex Research says CIMB Group, DRB-Hicom, Patimas, AirAsia, Benalec and Favelle Favco could see trading interest on Wednesday following fresh corporate developments. It said CIMB would pay RM945mil to buy a 58% stake in San Miguel Corp's banking unit. As for DRB Hicom, the group has proposed to enter China vehicle market through an acquisition of a Hong Kong company. Patimas has informed Bursa that its directors have not received any offer from Tencent Holdings Ltd of HK to acquire 15% of stake in the group. JF Apex Research said in AirAsia, the group may dissolve its Japan based JV with All Nippon Airways (ANA) due to disagreement between the companies over how to operate the business. Attention would also be on Benelac after the EGM's approval on its Melaka land sale amidst questioning by the shareholders of the pricing of the land. As for Favelle Favco, the group won a contract worth RM161mil to supply offshore and tower cranes. On the market outlook, it said US stocks finished sharply lower in volatile trading Tuesday after briefly wiping out most of their losses, with all key S&P sectors closing in the red, as the Bank of Japan's latest monetary policy decision disappointed investors. Similarly, European shares closed sharply lower, on ongoing concerns about the scaling back of monetary stimulus programs by central banks. "On the local exchange, the FBM KLCI fell 8.23 points to 1779.57 points. Today, Asian stocks could be set for heavy losses after global equity markets skidded 1% and the yen soared 3% amid disappointment at Bank of Japan inaction to calm a volatile government bond market," said JF Apex Research. |
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