Showing posts with label cimb. Show all posts
Showing posts with label cimb. Show all posts
Sunday, 25 February 2024
Wednesday, 11 November 2015
Layoffs in Malaysian banks a symptom of slowing regional economy
BY BOO SU-LYN
Jayant Menon, a lead economist at the Asian Development Bank said banks would need to undertake cost-cutting measures due to slowing economic growth in the region. — Picture by Saw Siow Feng
KUALA LUMPUR, Nov 1 — The recent string of restructuring by several banks in Malaysia is due to an unexpectedly bigger impact from slowing economic growth in the region amid falling government revenues, analysts have said.
Jayant Menon, a lead economist at the Asian Development Bank said banks would need to undertake cost-cutting measures due to slowing economic growth in the region. — Picture by Saw Siow Feng
KUALA LUMPUR, Nov 1 — The recent string of restructuring by several banks in Malaysia is due to an unexpectedly bigger impact from slowing economic growth in the region amid falling government revenues, analysts have said.
Asian Development Bank lead economist (trade and regional cooperation) Jayant Menon said the sluggish economy in the region, chiefly in China but with a larger than expected effect on its trading partners such as Malaysia, would affect many sectors of the economy, including services like banking.
“With dwindling government revenues following the oil and commodity price decline, the government-linked banks can no longer expect large subsidies to weather the slowdown, and will need to undertake cost-cutting measures, such as retrenchments, to remain competitive,” Jayant told Malay Mail Online.
Bloomberg TV Malaysia reported on Tuesday that Hong Leong Bank Bhd announced its mutual separation scheme on October 21, following other banks like CIMB Group Holdings Bhd, RHB Capital Bhd and Affin Bank Bhd that had laid off workers.
Government-linked CIMB Group Holdings reportedly cut 11.1 per cent of its total workforce earlier this year, or 3,599 employees, while RHB Banking Group reportedly said last September that there was no specific target on the number of staff that RHB Capital would retrench.
RAM’s co-head of financial institution ratings Wong Yin Ching noted that some Malaysian banks have embarked on merger and acquisition exercises over the last few years that have resulted in a bigger workforce, besides relying more on technology.
“Hence, as banks pursue greater cost efficiency in this increasingly competitive environment, we have seen various measures being implemented to reduce their workforce.
“These have been undertaken with greater urgency now given the softer earnings outlook in this more challenging economic environment with slower loan growth and continued margin compression,” Wong said.
Maybank Investment Bank group chief economist Suhaimi Ilias also pointed to the mergers and acquisitions in the banking sector that have led to excess staff, like at CIMB Investment Bank following the Royal Bank of Scotland (RBS) Asia Pacific acquisition, as well as the RHB-OSK and Affin-Hwang mergers.
“Amid pressure on interest income and intense competition for fee-based income, banks have to manage their costs-income ratio (CIR) and boost revenue per worker as well as overall productivity.
“The future of banking is also changing as information and communication technology play increasing role in the provision of services,” Suhaimi said.
- See more at: http://www.themalaymailonline.com/malaysia/article/layoffs-in-malaysian-banks-a-symptom-of-slowing-regional-economy-analy#sthash.51WHcbVH.dpuf
Friday, 24 January 2014
CIMB’s private placement exercise draws mixed reactions from analysts
CIMB’s private placement exercise draws mixed reactions from analysts
by Sharon Kong, sharonkong@theborneopost.com.
Posted on January 16, 2014, Thursday
KUCHING: CIMB Group Holdings Bhd’s (CIMB) recent private placement exercise has garnered mixed reactions from various analysts, with adverse market movements the cause of this latest development.
According to RHB Research Institute Sdn Bhd (RHB Research), the capital-raising could possibly have been prompted by adverse market movements. This is due to CIMB having said in its statement to Bursa Malaysia that the sharp depreciation of the Indonesian Rupiah had set back to its capital accumulation plan.
The research house further pointed out that the adverse direction that bond yields have seen in 2013 may have also prompted the fund-raising exercise.
“Based on its first nine months of 2013 (9M13) results, adverse forex and interest rate movements have shaved off RM1.5 billion in shareholders’ equity – exchange fluctuation reserve of RM693 millon and available for sale (AFS) revaluation reserve of RM817 million.
“By our estimates, this translates to RM1.1 billion in CET-1 capital, after taking into account the required regulatory adjustment of a 55 per cent haircut for AFS reserves,” RHB Research said.
With the issue of capital addressed, two things that RHB Research thinks investors will now seek further guidance on from management are the sustainable return on equity (ROE) level going forward, and whether the dividend reinvestment schem (DRS) will continue.
Looking ahead, for 2014, it thinks a 15 per cent ROE target may be possible. This will also be similar to Malayan Bank Bhd’s (Maybank) 2013 ROE target, post the RM3.66 billion capital raising exercise it did in 2012.
Also, now that CIMB has shored up its capital, it remains to be seen whether management will opt to keep in place the DRS, the research house added.
“The latter appears to be well received, achieving a take-up rate of 80.2 per cent for the recent second quarter of 2013 (2Q13) interim dividend.
“The flipside is that the DRS is slightly dilutive, with an estimated one per cent impact on financial year 2014 forecast (FY14F) earnings per share (EPS) and 40 basis points (bps) to FY14F ROE,” it noted.
According to analyst Cheah King Yoong of Alliance Research Sdn Bhd (Alliance Research), the capital raising exercise engaged by CIMB came as a surprise to them.
He similarly opined that they are not certain whether the group will continue with its dividend reinvestment plan (DRP) upon the completion of this private placement exercise.
“Should the research house assume that the group will be utilising the net proceeds raised to retire part of its borrowing and continuing with its DRP, its FY14-FY15 earnings per share (EPS) forecasts will be diluted by three to four per cent,” he noted.
In terms of earnings forecast for CIMB, Cheah highlighted that pending further clarifications by the management with regards to the utilisation of its net proceeds, and the continuity of its DRP, they made no changes to their earnings estimates for now.
“We will revise our earnings estimates for the group post our meeting with the management next week,” he added.
Read more: http://www.theborneopost.com/2014/01/16/cimbs-private-placement-exercise-draws-mixed-reactions-from-analysts/#ixzz2rEaYfgwL
Main points:
1. Adverse forex and interest rate movements have shaved off RM1.5 billion in shareholders' equity.
2. This translates t RM1.1 billion in CET-1 capital.
3. The capital raising exercise by CIMB came as a surprise.
4. What will be the sustainable ROE going forward?
5. Will the DRS (dividend reinvestment scheme) be kept in place?
6. DRS is slightly dilutive, with an estimated 1% impact on financial year 2014 forecast (FY14F) EPS and 40 basis points (bps) to FY14F ROE.
Scenario analysis:
Assuming:
1. No changes to the earnings estimates.
2. CIMB utilising the net proceeds raised to retire part of its borrowing and continuing with its DRP.
It is forecasted that these will impact on CIMB's FY14-FY15 EPS, diluting it by 3 to 4%.
(Share price of CIMB closed at 6.80 per share on 23.1.2014.)
1 Year Chart
Long term Chart
by Sharon Kong, sharonkong@theborneopost.com.
Posted on January 16, 2014, Thursday
KUCHING: CIMB Group Holdings Bhd’s (CIMB) recent private placement exercise has garnered mixed reactions from various analysts, with adverse market movements the cause of this latest development.
According to RHB Research Institute Sdn Bhd (RHB Research), the capital-raising could possibly have been prompted by adverse market movements. This is due to CIMB having said in its statement to Bursa Malaysia that the sharp depreciation of the Indonesian Rupiah had set back to its capital accumulation plan.
The research house further pointed out that the adverse direction that bond yields have seen in 2013 may have also prompted the fund-raising exercise.
“Based on its first nine months of 2013 (9M13) results, adverse forex and interest rate movements have shaved off RM1.5 billion in shareholders’ equity – exchange fluctuation reserve of RM693 millon and available for sale (AFS) revaluation reserve of RM817 million.
“By our estimates, this translates to RM1.1 billion in CET-1 capital, after taking into account the required regulatory adjustment of a 55 per cent haircut for AFS reserves,” RHB Research said.
With the issue of capital addressed, two things that RHB Research thinks investors will now seek further guidance on from management are the sustainable return on equity (ROE) level going forward, and whether the dividend reinvestment schem (DRS) will continue.
Looking ahead, for 2014, it thinks a 15 per cent ROE target may be possible. This will also be similar to Malayan Bank Bhd’s (Maybank) 2013 ROE target, post the RM3.66 billion capital raising exercise it did in 2012.
Also, now that CIMB has shored up its capital, it remains to be seen whether management will opt to keep in place the DRS, the research house added.
“The latter appears to be well received, achieving a take-up rate of 80.2 per cent for the recent second quarter of 2013 (2Q13) interim dividend.
“The flipside is that the DRS is slightly dilutive, with an estimated one per cent impact on financial year 2014 forecast (FY14F) earnings per share (EPS) and 40 basis points (bps) to FY14F ROE,” it noted.
According to analyst Cheah King Yoong of Alliance Research Sdn Bhd (Alliance Research), the capital raising exercise engaged by CIMB came as a surprise to them.
He similarly opined that they are not certain whether the group will continue with its dividend reinvestment plan (DRP) upon the completion of this private placement exercise.
“Should the research house assume that the group will be utilising the net proceeds raised to retire part of its borrowing and continuing with its DRP, its FY14-FY15 earnings per share (EPS) forecasts will be diluted by three to four per cent,” he noted.
In terms of earnings forecast for CIMB, Cheah highlighted that pending further clarifications by the management with regards to the utilisation of its net proceeds, and the continuity of its DRP, they made no changes to their earnings estimates for now.
“We will revise our earnings estimates for the group post our meeting with the management next week,” he added.
Read more: http://www.theborneopost.com/2014/01/16/cimbs-private-placement-exercise-draws-mixed-reactions-from-analysts/#ixzz2rEaYfgwL
Main points:
1. Adverse forex and interest rate movements have shaved off RM1.5 billion in shareholders' equity.
2. This translates t RM1.1 billion in CET-1 capital.
3. The capital raising exercise by CIMB came as a surprise.
4. What will be the sustainable ROE going forward?
5. Will the DRS (dividend reinvestment scheme) be kept in place?
6. DRS is slightly dilutive, with an estimated 1% impact on financial year 2014 forecast (FY14F) EPS and 40 basis points (bps) to FY14F ROE.
Scenario analysis:
Assuming:
1. No changes to the earnings estimates.
2. CIMB utilising the net proceeds raised to retire part of its borrowing and continuing with its DRP.
It is forecasted that these will impact on CIMB's FY14-FY15 EPS, diluting it by 3 to 4%.
(Share price of CIMB closed at 6.80 per share on 23.1.2014.)
1 Year Chart
Long term Chart
Thursday, 30 August 2012
CIMB - Return on Retained Earnings
| CIMB | |||||||
| Year | DPS | EPS | Retained EPS | ||||
| 2002 | 1.1 | 10.8 | a | 9.7 | |||
| 2003 | 1.9 | 14.9 | 13 | ||||
| 2004 | 3.6 | 14 | 10.4 | ||||
| 2005 | 7.2 | 15 | 7.8 | ||||
| 2006 | 5.4 | 23.6 | 18.2 | ||||
| 2007 | 14.6 | 30.9 | 16.3 | ||||
| 2008 | 9.3 | 27.7 | 18.4 | ||||
| 2009 | 9.9 | 38.3 | 28.4 | ||||
| 2010 | 27.3 | 47 | 19.7 | ||||
| 2011 | 20 | 50.9 | b(P) | 30.9 | |||
| 2012 | |||||||
| Total | 100.3 | c | 273.1 | d | 172.8 | e | |
| From | 2002 | to | 2011 | ||||
| EPS increase (sen) | b-a | 40.1 | |||||
| DPO | c/d | 37% | |||||
| Return on retained earnings | (b-a)/e | 23% | |||||
| (Figures are in sens) | |||||||
Monday, 25 April 2011
Tuesday, 8 March 2011
Banking sector: Valuations are undemanding
Banking sector: Valuations are undemanding
Written by Financial Daily
Tuesday, 08 March 2011 11:28
Banking sector
Maintain overweight:
The sector’s value proposition lies in (i) stable economic growth which lends support to our aggregate net profit growth forecast of 11.6% for 2011 and 11.8% for 2012; (ii) benign inflation and bottoming margins; (iii) steady loan growth momentum; (iv) potential Economic Transformation Programme upside surprises; (v) cross-synergies and burgeoning contribution from regional operations to group earnings; (vi) healthy capital ratios; and (vii) decent valuations and dividend yields. RHB Capital and CIMB continue to be our top picks.
Results were broadly within expectations, with recurring net profit up 24% year-on-year (y-o-y). While cumulative loan growth was a commendable 12.9% y-o-y, net interest margin (NIM) compression during the period contributed to a more moderate 10.3% y-o-y expansion in net interest income, while fee income and other non-interest income growth rates were a modest 6.8% y-o-y respectively. Operating expenses, meanwhile, rose 10.1% y-o-y. Consequently, operating profit rose by a slower 11% y-o-y, while the jump in net profit was driven primarily by lower loan loss provisions, which fell a sizeable 34.5% y-o-y in 2010.
Our industry loan growth estimate is raised to 11.5% for 2011 from 10%-11% previously and we forecast 2012 loan growth at 10.5%. We expect household loan demand to moderate from 13.2% for 2010 to about 10.5% for 2011 and 8% for 2012, but expect non-household (business/government) lending to pick up the slack with growth rates of 12.7% and 13.5% for 2011 and 2012 respectively, from 12.3% for 2010.
We project recurring net profit growth of 11.6% and 11.8% for 2011 and 2012 respectively for the top 5 banks, on operating profit growth of 8.6% for 2011 and 12.4% for 2012. We expect cumulative loans (domestic and regional) for the top 5 banks to expand by 12% for 2011, 10.9% for 2012. While we have imputed a 6-11 basis points NIM contraction this year, we expect NIMs to bottom out and recover in 2012, aided in part by likely rate hikes in 2H10. Amid volatility in the external environment, we are factoring in moderately higher non-performing loans.
Valuations are undemanding, in our opinion, with the large banks trading at a prospective 2011 calendarised PER of 13.1 times, 11.7 times for 2012. Separately, the sector trades at a prospective 2012 P/BV of 1.9 times supported by an average ROE of 16.9%. Dividend yields, meanwhile, average a decent 4.2% and 4.7% for 2011 and 2012 respectively. — Maybank IB Research, March 7
This article appeared in The Edge Financial Daily, March 8, 2011.
Written by Financial Daily
Tuesday, 08 March 2011 11:28
Banking sector
Maintain overweight:
The sector’s value proposition lies in (i) stable economic growth which lends support to our aggregate net profit growth forecast of 11.6% for 2011 and 11.8% for 2012; (ii) benign inflation and bottoming margins; (iii) steady loan growth momentum; (iv) potential Economic Transformation Programme upside surprises; (v) cross-synergies and burgeoning contribution from regional operations to group earnings; (vi) healthy capital ratios; and (vii) decent valuations and dividend yields. RHB Capital and CIMB continue to be our top picks.
Results were broadly within expectations, with recurring net profit up 24% year-on-year (y-o-y). While cumulative loan growth was a commendable 12.9% y-o-y, net interest margin (NIM) compression during the period contributed to a more moderate 10.3% y-o-y expansion in net interest income, while fee income and other non-interest income growth rates were a modest 6.8% y-o-y respectively. Operating expenses, meanwhile, rose 10.1% y-o-y. Consequently, operating profit rose by a slower 11% y-o-y, while the jump in net profit was driven primarily by lower loan loss provisions, which fell a sizeable 34.5% y-o-y in 2010.
Our industry loan growth estimate is raised to 11.5% for 2011 from 10%-11% previously and we forecast 2012 loan growth at 10.5%. We expect household loan demand to moderate from 13.2% for 2010 to about 10.5% for 2011 and 8% for 2012, but expect non-household (business/government) lending to pick up the slack with growth rates of 12.7% and 13.5% for 2011 and 2012 respectively, from 12.3% for 2010.
We project recurring net profit growth of 11.6% and 11.8% for 2011 and 2012 respectively for the top 5 banks, on operating profit growth of 8.6% for 2011 and 12.4% for 2012. We expect cumulative loans (domestic and regional) for the top 5 banks to expand by 12% for 2011, 10.9% for 2012. While we have imputed a 6-11 basis points NIM contraction this year, we expect NIMs to bottom out and recover in 2012, aided in part by likely rate hikes in 2H10. Amid volatility in the external environment, we are factoring in moderately higher non-performing loans.
Valuations are undemanding, in our opinion, with the large banks trading at a prospective 2011 calendarised PER of 13.1 times, 11.7 times for 2012. Separately, the sector trades at a prospective 2012 P/BV of 1.9 times supported by an average ROE of 16.9%. Dividend yields, meanwhile, average a decent 4.2% and 4.7% for 2011 and 2012 respectively. — Maybank IB Research, March 7
This article appeared in The Edge Financial Daily, March 8, 2011.
Tuesday, 24 August 2010
CIMB invests RM1.1b in IT platform
CIMB invests RM1.1b in IT platform
By Adeline Paul Raj
Published: 2010/08/24
The 1Platform project will be completed on a country-by-country basis, starting with Thailand, followed by Malaysia, Indonesia and Singapore.
CIMB Group (1023), the country's second largest banking group, will spend RM1.1 billion over the next five years to implement a unified banking platform across Malaysia, Indonesia, Singapore and Thailand.
The so-called 1Platform project, which involves building a single operations and information technology (IT) framework, will help it operate as one entity across the region, its group chief executive officer Datuk Seri Nazir Razak said.
"(It) unifies CIMB group and enables us to compete as a truly regional bank. It will also facilitate product development and proliferation across the region, enabling our people to more effectively bundle and cross-sell products," he told reporters after CIMB inked agreements with its four main technology partners for the project yesterday.
The partners were awarded jobs worth about 40 per cent of the total investment.
The RM1.1 billion investment, which will come from internal funds, is the biggest component of the group's regional transformation blueprint, for which CIMB has budgeted RM2.1 billion over up to five years.
CIMB chose Silverlake Axis, a homegrown global IT solutions provider, to provide the core banking system. Its other partners for the project are IDS Scheer, IBM and Accenture.
Given the scale and magnitude of the 1Platform project, its implementation will be completed on a country-by-country basis, starting with Thailand, followed by Malaysia, Indonesia and Singapore.
The whole group is expected to be on the unified platform by 2015, Nazir said.
CIMB's investment in the project is on top of its usual RM350 million a year spending on IT.
"The full impact of our investment in 1Platform and other transformation initiatives will only be felt progressively over the next three to five years," he said.
On another matter, Nazir said CIMB "stands ready" to apply for a dual-listing on the Jakarta Stock Exchange once rules there permit this.
Bloomberg reported later yesterday that the group wanted to list there towards the end of this year or early next year, citing PT Bank CIMB Niaga president director Arwin Rashid.
Read more: CIMB invests RM1.1b in IT platform http://www.btimes.com.my/Current_News/BTIMES/articles/itcimb-2/Article/index_html#ixzz0xTyQItQA
Thursday, 8 July 2010
CIMB monitoring SJAM
Thursday July 8, 2010
CIMB monitoring SJAM
KUALA LUMPUR: CIMB Group Holdings Bhd is monitoring the situation at SJ Asset Management Sdn Bhd (SJAM), which is currently being examined by the Securities Commision (SC) due to irregularities in its accounts.
Chief executive officer Datuk Seri Nazir Razak said: “We are concerned about this.
CIMB Bank Group Chief Executive Datuk Seri Nazir Razak delivering his keynote address at the CIMB Private Banking Conference 2010 on Wednesday.“SJAM was one of two fund managers our private bankers had recommended to clients and by extension, some of them had invested in the asset management company.”
Asked if the investment by CIMB clients placed in SJAM was high, Nazir said high was a relative number. “The key thing is that even if it was one sen placed in SJAM, it’s our clients’ money.”
Beyond these facts, Nazir said he did not know more, except that the SC was examining SJAM’s records and that independent auditors had been called in to look closer at its accounts
Saturday, 15 May 2010
A quick look at CIMB (15.5.2010)
A quick look at CIMB (15.5.2010)
http://spreadsheets.google.com/pub?key=tKdR1ezq71j9tVJQn-ldfKw&output=html
Friday, 13 November 2009
Thursday, 22 October 2009
Banks top gainers on Bursa
Banks top gainers on Bursa
Tags: AMMB Holdings Bhd | Banking deals | banking stocks | CIMB Group Holdings Bhd | FBM KLCI | HLBB | Macquarie Research | Malayan Banking Bhd | PBB | RHB Capital Bhd | Wong Chew Hann
Written by Yong Yen Nie
Thursday, 22 October 2009 11:41
KUALA LUMPUR: Banking stocks, led by CIMB Group Holdings Bhd and HONG LEONG BANK BHD [] (HLBB), have emerged as top gainers on the FTSE Bursa Malaysia KUALA LUMPUR COMPOSITE INDEX [] (FBM KLCI) since Sept 30.
Analysts said the rise in the prices of banking shares was an indication of the market’s confidence in the performance of banks. It could also point to the absence of near-term downside surprises.
HLBB was ranked first among the top 10 gainers on the FBM KLCI after advancing 14.16% since Sept 30, while CIMB ranked second with a gain of 13.7%, according to Bloom-berg data.
Six of the top 10 gainers on the benchmark index were financial institutions. AMMB HOLDINGS BHD [] came in fourth with a gain of 11.03%, RHB CAPITAL BHD [] sixth (7.1%), PUBLIC BANK BHD [] (PBB) eighth (4.9%) and MALAYAN BANKING BHD [] ninth (3.76%).
The Kuala Lumpur Financial Index has outperformed the FBM KLCI by 2.9 percentage points since Sept 30. As of yesterday, it had risen 7.7% to 10,712 points compared with a 4.8% gain to 1,260.06 points for the FBM KLCI.
Analysts said banking stocks had been “running” since August, following improved results in the second quarter of calendar year 2009, which acted as catalysts for more earnings upgrades in the banking sector.
Maybank Investment Bank Research banking analyst Wong Chew Hann said most banking stocks might have soared mainly due to market confidence that banks would not be hit by any significant charges over the near term.
“Investors are also keen on CIMB, as they believe the banking group will clinch more lucrative investment banking deals in the future, as the global economic and market outlook improves,” she told The Edge Financial Daily yesterday.
Commenting on HLBB’s performance, a banking analyst with a foreign research house said the counter might be playing catch-up, given that the valuation of the bank was one of the lowest among local financial institutions.
Given that the reporting season for banks was near, investing interest in financial institutions might have heightened, especially as the lenders were expected to show positive results in the third quarter of calendar year 2009.
Together with positive news of the economy recovering, financial institutions, being proxies of the economy, were also bound to be beneficiaries, the analyst said.
PBB had already given investors a “feel” of what to expect from the other banks after its net profit in the third quarter of the financial year ending Dec 31, 2009 (3QFY09) rose 3.68% year-on-year to RM639.05 million on the back of strong loans and deposit growth and stable asset quality.
PBB’s net profit had come in slightly above analysts’ expectations of a 2%-3% growth. Revenue, however, fell 12.5% to RM2.44 billion in 3QFY09 from a year earlier, while earnings per share grew to 18.52 sen from 18.37 sen.
Nevertheless, Macquarie Research believed that the group’s ability to outperform its peers in loan growth, as well as maintain its pristine asset quality would remain its key strengths.
In a research report, Nomura Securities Malaysia Sdn Bhd said it was bullish on banks, with positive catalysts of better loan growth and falling bad debt provisions going forward.
It said CIMB was the preferred banking pick, given that its return on equity, as guided by management, was on positive trajectory to reach 18% over the next two to three years.
Its corporate and investment banking business was also expected to benefit from the government’s move to raise the profile of domestic capital markets with foreign investors, Nomura said.
Meanwhile, in the mid- to small-cap segment, investors were largely positive on AMMB, underpinned by vastly improved asset quality and undemanding valuations at 1.5 times price-to-book.
Several banking counters had closed at their 52-week highs in the past two days.
HLBB and PBB closed at a 52-week high yesterday, with HLBB rising 12 sen to RM7.50 with 2.51 million shares done and PBB adding four sen to RM10.70 on a turnover of 2.21 million shares.
CIMB, AMMB and Maybank had achieved the same feat on Tuesday. CIMB closed unchanged yesterday at RM12.62 while AMMB slipped two sen to RM4.73 from its 52-week high of RM4.76 with 11.58 million shares done.
Maybank closed at RM6.98 on Tuesday and gave up eight sen yesterday with 5.6 million shares changing hands.
This article appeared in The Edge Financial Daily, October 22, 2009.
Tags: AMMB Holdings Bhd | Banking deals | banking stocks | CIMB Group Holdings Bhd | FBM KLCI | HLBB | Macquarie Research | Malayan Banking Bhd | PBB | RHB Capital Bhd | Wong Chew Hann
Written by Yong Yen Nie
Thursday, 22 October 2009 11:41
KUALA LUMPUR: Banking stocks, led by CIMB Group Holdings Bhd and HONG LEONG BANK BHD [] (HLBB), have emerged as top gainers on the FTSE Bursa Malaysia KUALA LUMPUR COMPOSITE INDEX [] (FBM KLCI) since Sept 30.
Analysts said the rise in the prices of banking shares was an indication of the market’s confidence in the performance of banks. It could also point to the absence of near-term downside surprises.
HLBB was ranked first among the top 10 gainers on the FBM KLCI after advancing 14.16% since Sept 30, while CIMB ranked second with a gain of 13.7%, according to Bloom-berg data.
Six of the top 10 gainers on the benchmark index were financial institutions. AMMB HOLDINGS BHD [] came in fourth with a gain of 11.03%, RHB CAPITAL BHD [] sixth (7.1%), PUBLIC BANK BHD [] (PBB) eighth (4.9%) and MALAYAN BANKING BHD [] ninth (3.76%).
The Kuala Lumpur Financial Index has outperformed the FBM KLCI by 2.9 percentage points since Sept 30. As of yesterday, it had risen 7.7% to 10,712 points compared with a 4.8% gain to 1,260.06 points for the FBM KLCI.
Analysts said banking stocks had been “running” since August, following improved results in the second quarter of calendar year 2009, which acted as catalysts for more earnings upgrades in the banking sector.
Maybank Investment Bank Research banking analyst Wong Chew Hann said most banking stocks might have soared mainly due to market confidence that banks would not be hit by any significant charges over the near term.
“Investors are also keen on CIMB, as they believe the banking group will clinch more lucrative investment banking deals in the future, as the global economic and market outlook improves,” she told The Edge Financial Daily yesterday.
Commenting on HLBB’s performance, a banking analyst with a foreign research house said the counter might be playing catch-up, given that the valuation of the bank was one of the lowest among local financial institutions.
Given that the reporting season for banks was near, investing interest in financial institutions might have heightened, especially as the lenders were expected to show positive results in the third quarter of calendar year 2009.
Together with positive news of the economy recovering, financial institutions, being proxies of the economy, were also bound to be beneficiaries, the analyst said.
PBB had already given investors a “feel” of what to expect from the other banks after its net profit in the third quarter of the financial year ending Dec 31, 2009 (3QFY09) rose 3.68% year-on-year to RM639.05 million on the back of strong loans and deposit growth and stable asset quality.
PBB’s net profit had come in slightly above analysts’ expectations of a 2%-3% growth. Revenue, however, fell 12.5% to RM2.44 billion in 3QFY09 from a year earlier, while earnings per share grew to 18.52 sen from 18.37 sen.
Nevertheless, Macquarie Research believed that the group’s ability to outperform its peers in loan growth, as well as maintain its pristine asset quality would remain its key strengths.
In a research report, Nomura Securities Malaysia Sdn Bhd said it was bullish on banks, with positive catalysts of better loan growth and falling bad debt provisions going forward.
It said CIMB was the preferred banking pick, given that its return on equity, as guided by management, was on positive trajectory to reach 18% over the next two to three years.
Its corporate and investment banking business was also expected to benefit from the government’s move to raise the profile of domestic capital markets with foreign investors, Nomura said.
Meanwhile, in the mid- to small-cap segment, investors were largely positive on AMMB, underpinned by vastly improved asset quality and undemanding valuations at 1.5 times price-to-book.
Several banking counters had closed at their 52-week highs in the past two days.
HLBB and PBB closed at a 52-week high yesterday, with HLBB rising 12 sen to RM7.50 with 2.51 million shares done and PBB adding four sen to RM10.70 on a turnover of 2.21 million shares.
CIMB, AMMB and Maybank had achieved the same feat on Tuesday. CIMB closed unchanged yesterday at RM12.62 while AMMB slipped two sen to RM4.73 from its 52-week high of RM4.76 with 11.58 million shares done.
Maybank closed at RM6.98 on Tuesday and gave up eight sen yesterday with 5.6 million shares changing hands.
This article appeared in The Edge Financial Daily, October 22, 2009.
Sunday, 11 October 2009
Money flowing intotop three banks
Money flowing intotop three banks
Tags: CIMB Group Holdings Bhd | Malayan Banking Bhd | Public Bank Bhd | Top three banks
Written by Joyce Goh
Tuesday, 06 October 2009 10:32
PETALING JAYA: Investors have been seizing opportunities to pick up banking stocks on the back of their weaker share prices last week. For the week ended Oct 2, investors purchased some RM38.96 million worth of stock in Bloomberg’s top 20 buying-on-weakness, a list of which the top three banks in the country emerged on the top three spots.
The second largest bank in terms of assets — CIMB Group Holdings Bhd — saw the highest inflow of funds in terms of value, following a 0.2% decline in its share price week-on-week. The decline caused a two sen drop in share price to RM11.14 but investors acquired RM6.66 million worth of the banking group’s stock.
Meanwhile, PUBLIC BANK BHD []’s share price fell eight sen in a week closing at RM10.18 last Friday. This change of 0.8% did not deter investors who acquired RM6.65 million worth of the stock in the country’s third largest bank.
The largest bank in the country — MALAYAN BANKING BHD [] (Maybank) — saw an inflow of RM5.71 million into the stock following its share price falling 0.6% week-on-week. The stock ended at RM6.64 last Friday, down four sen from a week before.
When asked on this, banking analysts believe this trend could be driven by two factors — investors’ rising confidence in the sector as well as the fact that the top three banks make up quite a bit of the FBM KUALA LUMPUR COMPOSITE INDEX [] weightage.
“The top three banks in Bursa make up 30% in terms of the weightage in FBMKLCI 30. Therefore, when there is share price weakness, there’ll be funds that will come in and support it. So it (money flowing into the stocks due to share price weakness) could be because of that,” Maybank Investment Bank Research’s senior analyst Wong Chew Hann told The Edge Financial Daily.
“It could also be because investors are expecting improved earnings to flow into banks as the economy slowly mends itself. On top of that, their asset quality is intact. Overall, our banks are on steady ground,” she said.
Wong said banks are expected to see loans growth this year, albeit a slower growth compared to last year. “We are looking at 6% loans growth for the sector. Last year was 12.9%. We also think that 2010 will not be as good as 2008... looking at single digits growth. Our house view is that the economy will rebound next year but we will not be seeing that 5% to 7% GDP growth,” she noted.
CIMB ended yesterday at its 52-week high of RM11.50, up 36 sen from its close last Friday while Maybank added one sen for the same period to RM6.65.
Public Bank ended Monday unchanged from its close last Friday of RM10.18.
This article appeared in The Edge Financial Daily, October 6, 2009.
Tags: CIMB Group Holdings Bhd | Malayan Banking Bhd | Public Bank Bhd | Top three banks
Written by Joyce Goh
Tuesday, 06 October 2009 10:32
PETALING JAYA: Investors have been seizing opportunities to pick up banking stocks on the back of their weaker share prices last week. For the week ended Oct 2, investors purchased some RM38.96 million worth of stock in Bloomberg’s top 20 buying-on-weakness, a list of which the top three banks in the country emerged on the top three spots.
The second largest bank in terms of assets — CIMB Group Holdings Bhd — saw the highest inflow of funds in terms of value, following a 0.2% decline in its share price week-on-week. The decline caused a two sen drop in share price to RM11.14 but investors acquired RM6.66 million worth of the banking group’s stock.
Meanwhile, PUBLIC BANK BHD []’s share price fell eight sen in a week closing at RM10.18 last Friday. This change of 0.8% did not deter investors who acquired RM6.65 million worth of the stock in the country’s third largest bank.
The largest bank in the country — MALAYAN BANKING BHD [] (Maybank) — saw an inflow of RM5.71 million into the stock following its share price falling 0.6% week-on-week. The stock ended at RM6.64 last Friday, down four sen from a week before.
When asked on this, banking analysts believe this trend could be driven by two factors — investors’ rising confidence in the sector as well as the fact that the top three banks make up quite a bit of the FBM KUALA LUMPUR COMPOSITE INDEX [] weightage.
“The top three banks in Bursa make up 30% in terms of the weightage in FBMKLCI 30. Therefore, when there is share price weakness, there’ll be funds that will come in and support it. So it (money flowing into the stocks due to share price weakness) could be because of that,” Maybank Investment Bank Research’s senior analyst Wong Chew Hann told The Edge Financial Daily.
“It could also be because investors are expecting improved earnings to flow into banks as the economy slowly mends itself. On top of that, their asset quality is intact. Overall, our banks are on steady ground,” she said.
Wong said banks are expected to see loans growth this year, albeit a slower growth compared to last year. “We are looking at 6% loans growth for the sector. Last year was 12.9%. We also think that 2010 will not be as good as 2008... looking at single digits growth. Our house view is that the economy will rebound next year but we will not be seeing that 5% to 7% GDP growth,” she noted.
CIMB ended yesterday at its 52-week high of RM11.50, up 36 sen from its close last Friday while Maybank added one sen for the same period to RM6.65.
Public Bank ended Monday unchanged from its close last Friday of RM10.18.
This article appeared in The Edge Financial Daily, October 6, 2009.
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