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Alliance Research downgrades Banking sector to Neutral
by Cals Tue 06 Aug 2013, 09:37
Alliance Research downgrades Banking sector to Neutral
Business & Markets 2013
Written by theedgemalaysia.com
Tuesday, 06 August 2013 08:53
KUALA LUMPUR (Aug 6): Alliance IB Research has downgraded its rating on the banking sector to Neutral (from Overweight previously).
In a note Tuesday, Alliance Research vice-president for equity Cheah King Yoong said the downgrade was premised on (1) limited upside potential to target prices, (2) 2Q13 results may not be exciting, (3) downside risk to non-interest income projections, (4) risk of foreign selling due to high foreign shareholdings, and (5) potential new measures and policy tightening by the authority could dampen lending activities in the latter part of this year and 2014.
Furthermore, Cheah said he expects Maybank and RHB Capital 2QCY13 earnings would also be dampened by loan defaults by entities related to Malaysia AE Model Bhd (Maemode).
“Meanwhile, we observe that overall upside potential from our target valuations is limited, as most banking stocks under our coverage are approaching close to our target prices.
“We also take the opportunity to downgrade AMMB to Neutral (from Buy),” he said.
Business & Markets 2013
Written by theedgemalaysia.com
Tuesday, 06 August 2013 08:53
KUALA LUMPUR (Aug 6): Alliance IB Research has downgraded its rating on the banking sector to Neutral (from Overweight previously).
In a note Tuesday, Alliance Research vice-president for equity Cheah King Yoong said the downgrade was premised on (1) limited upside potential to target prices, (2) 2Q13 results may not be exciting, (3) downside risk to non-interest income projections, (4) risk of foreign selling due to high foreign shareholdings, and (5) potential new measures and policy tightening by the authority could dampen lending activities in the latter part of this year and 2014.
Furthermore, Cheah said he expects Maybank and RHB Capital 2QCY13 earnings would also be dampened by loan defaults by entities related to Malaysia AE Model Bhd (Maemode).
“Meanwhile, we observe that overall upside potential from our target valuations is limited, as most banking stocks under our coverage are approaching close to our target prices.
“We also take the opportunity to downgrade AMMB to Neutral (from Buy),” he said.
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