Malaysia banking sector call remains OVERWEIGHT
Recent 3QCY09 results further highlighted the resilience of domestic banks in these trying times, with some even reporting record quarterly earnings. The sustained growth of non-interest income and slide in credit costs will drive earnings growth in 4QCY09 and into 2010. We like CIMB Group Holdings for its regional as well as its strong non-interest income growth going forward. Public Bank continues to be an investment for its superior earnings, ROE and asset quality, while we believe Maybank will finally allay sceptics’ concerns when it continues reporting strong quarterly profits going forward. AMMB Holdings’ forward valuations remain one of the most inexpensive amongst the mid-cap banks and will benefit from strong upward market movements given its higher beta.
BANKING SECTOR STOCKS UNDER COVERAGE
Company Call TP (RM)
CIMB Grp Buy 15.00
Public Bank Buy 12.80
AMMB Hdlgs Buy 5.24
Maybank MAY Buy 8.10
Hong Leong hold 8.71
source: Mercury Research
