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Share
Price:
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MYR4.67
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Target
Price:
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MYR4.40
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Recommendation:
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Sell
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Niaga’s 1Q16
results weak
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CIMB Niaga’s (Niaga) 1Q16 earnings came in below our
expectation, as provision levels remained more elevated than expected.
We nevertheless maintain our forecasts for now, given that MSS savings
should kick in, in full, from 2Q16 onwards, while credit costs should
moderate further in 2H16. Niaga’s operating environment remains
challenging and with capital markets still weak, much is priced in - we
downgrade CIMB Group to SELL, with an unchanged MYR4.40 TP, pegged to a
FY16 PBV of 0.9x.
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FYE Dec (MYR m)
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FY14A
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FY15A
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FY16E
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FY17E
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Operating income
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14,145.9
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15,395.8
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16,233.0
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17,140.1
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Pre-provision profit
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5,854.0
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6,146.8
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7,033.3
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7,568.9
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Core net profit
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3,159.0
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3,411.2
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3,917.5
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4,163.7
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Core EPS (MYR)
|
0.38
|
0.40
|
0.46
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0.49
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Core EPS growth (%)
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(31.1)
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5.6
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14.1
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6.3
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Net DPS (MYR)
|
0.15
|
0.14
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0.19
|
0.21
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Core P/E (x)
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12.3
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11.6
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10.2
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9.6
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P/BV (x)
|
1.0
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1.0
|
0.9
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0.9
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Net dividend yield (%)
|
3.2
|
3.0
|
4.1
|
4.5
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Book value (MYR)
|
4.53
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4.87
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5.10
|
5.39
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ROAE (%)
|
9.3
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8.7
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9.3
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9.4
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ROAA (%)
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0.8
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0.8
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0.8
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0.8
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Share
Price:
|
MYR3.22
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Target
Price:
|
MYR3.86
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Recommendation:
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Buy
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Buys land in
Melbourne CBD
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We are positive on SPSB’s latest acquisition in Melbourne
CBD. The land is strategically located in the Melbourne CBD and we
estimate a development net profit of MYR333.5m (+13sen EPS) in
FY2020-23. We maintain our earnings forecasts and MYR3.86 TP (on unchanged
30% discount to RNAV) for now. SPSB is our top BUY for the property
sector.
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FYE Dec (MYR m)
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FY14A
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FY15A
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FY16E
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FY17E
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Revenue
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3,810.1
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6,746.3
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5,319.9
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6,456.7
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EBITDA
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1,107.6
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2,063.3
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1,170.4
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1,420.5
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Core net profit
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376.0
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918.3
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659.7
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940.6
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Core EPS (sen)
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14.9
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35.7
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24.9
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35.5
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Core EPS growth (%)
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(17.2)
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140.1
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(30.2)
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42.6
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Net DPS (sen)
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9.7
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23.0
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14.9
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21.3
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Core P/E (x)
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21.7
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9.0
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12.9
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9.1
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P/BV (x)
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1.0
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0.9
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0.8
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0.8
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Net dividend yield (%)
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3.0
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7.1
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4.6
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6.6
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ROAE (%)
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6.6
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13.9
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8.8
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12.0
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ROAA (%)
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2.9
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6.2
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3.8
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5.1
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EV/EBITDA (x)
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10.1
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4.9
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9.0
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7.4
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Net debt/equity (%)
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32.5
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19.5
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21.5
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20.5
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Share
Price:
|
MYR1.16
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Target
Price:
|
MYR1.15
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Recommendation:
|
Buy
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1Q16 results in
line
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1Q16 earnings were within expectations. The strong YoY net
profit growth was mainly driven by Platinum Sentral. We maintain our
earnings forecasts and DCF-based TP of MYR1.15. Our BUY recommendation
is premised on an expected major earnings boost from the impending
acquisition of Menara Shell.
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FYE Dec (MYR m)
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FY14A
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FY15A
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FY16E
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FY17E
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Revenue
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70.2
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115.2
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124.4
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128.9
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Net property income
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53.3
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90.3
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100.3
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103.5
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Distributable income
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34.2
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54.0
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56.9
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60.6
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DPU (sen)
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7.5
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6.9
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7.0
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7.4
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DPU growth (%)
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0.0
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(8.1)
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0.8
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6.5
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Price/DPU(x)
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15.4
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16.7
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16.6
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15.6
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P/BV (x)
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0.8
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0.8
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0.8
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0.8
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DPU yield (%)
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6.5
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6.0
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6.0
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6.4
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ROAE (%)
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6.4
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7.5
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6.3
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6.7
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ROAA (%)
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4.0
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4.3
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3.5
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3.7
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Debt/Assets (x)
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0.4
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0.4
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0.4
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0.4
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SECTOR RESEARCH
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Sector Note
by
Desmond Ch'ng
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Industry loan growth slipped 1-ppt to just 6.4% YoY in
Mar 2016. Deposits, meanwhile, contracted 0.9% YoY versus +0.7% YoY
in Feb 2016. The risk to our 2016 industry loan growth forecast of
6.5% (+7.9% in 2015) is to the downside if current trends persist.
NEUTRAL maintained on the sector - BUY AFG, HL Bank and HLFG, SELL
AMMB and CIMB.
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MACRO RESEARCH
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Economics Research
by
Suhaimi Ilias
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Moderated as
deposits fall, loans slow
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Money supply (M3) growth moderated in March 2016 to
+0.9% YoY (Feb 2016: +2.7% YoY) amid fall in total deposits and
slower loans growth. The 3-months interbank rate continued to ease
since the SRR was cut by 50bps to 3.50% on 1 Feb 2016.
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Suhaimi Ilias
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Zamros
Dzulkafli
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NEWS
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Outside Malaysia:
U.S: Consumer loan demand higher in 1Q 2016, Fed survey
finds. U.S. consumers sought loans in the first quarter even as demand
from medium and large companies weakened, the Federal Reserve said. Banks
reported stronger demand from households for auto loans and other types
of borrowing, according to the Fed’s Senior Loan Officer Opinion Survey
for April published. Some said that lending terms on credit cards and
other consumer loans eased, while standards for car loans remained
basically unchanged. (Source: Bloomberg)
U.S: Fed survey finds banks tightening lending to energy
firms. Banks are tightening lending policies on companies in the energy
sector and restructuring loans, the Federal Reserve found in a survey
released May 2. In its quarterly report for 1Q 2016 bank lending
practices, the Fed included responses by lenders to special questions
about credit to firms in the oil and natural gas drilling or extraction
sector. (Source: Bloomberg)
E.U: Euro-Area manufacturing growing at `anemic' pace,
Markit says. Euro-area manufacturing growth was little changed last month
as stronger readings in Germany, Italy and Spain were offset by
contraction in France. The gauge rose to 51.7 from 51.6 in March, above
the 50 level that divides expansion from contraction and a provisional
reading of 51.5. (Source: Bloomberg)
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Other News:
Felda Global Ventures: To withdraw RSPO certificates.
Felda Group made the request for withdrawal of RSPO certificates for “58
complexes located throughout Malaysia.” The 58 complexes refer to the 58
palm oil mills within the group that have been RSPO certified. Typically
between five to eight estates supply fresh fruit bunch (FFB) to each
mill. Felda Group is currently addressing all sustainability issues along
the supply chain. This exercise allows a more inclusive certification
between commercially managed plantations by FGV and Felda smallholders.
The withdrawal would take effect today. (Source: The Edge Financial
Daily)
Astral Asia: Looking to boost land bank. Astral Asia plans
to increase land bank as it expects more investors and companies to cash
out from the palm oil industry. Astral has already scouted a potential
acquisition in Sarawak of about 35,000acres (14,164ha) and is
deliberating on the viability of the project owing to its terrain and
soil condition. Astral currently sells its fresh fruit bunch to local
palm oil mills and transporters. If it gets to increase its land bank, it
will have to venture into the downstream palm oil business. (Source: The
Edge Financial Daily)
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