SECTOR FOCUS OF THE DAY
Transport Sector : Bright spots in tourism and e-commerce NEUTRAL
Industry loan growth further moderated to 4.6%YoY in Oct 2017 from 5.2%YoY in Sept 2017 contributed by a slowdown in non-household loans while growth in household loans continued to be stable. Growth of non-household loans slipped to 4.0%YoY vs. 5.4%YoY in the preceding month while the household loan growth remained stable at 5.1%YoY. On a year-to-date (YTD) basis up until Oct 2017, industry loans growth continued to be slow at 3.52% annualised against our expectation of a 5.0-6.0% growth for 2017.
With an improvement in loan demand, we expect a pickup in loan growth in the remaining months of 2017. Post-3Q2017 results, the larger banks like Maybank has lowered its loan growth guidance to 3.0% while CIMB hinted of that its loan growth target of 7.0%, which would be a tall order for 2017. We expect the industry in 2017 to end at the lower end of our 5.0-6-0% projected growth. We maintain OVERWEIGHT on the sector. Our BUY calls are on RHB Bank (FV: RM6.00/share), Public Bank (FV: RM22.20/share) and CIMB (FV: RM6.60/share).
Others :
Cahya Mata Sarawak : 6-month extension for state road maintenance contract BUY
ECONOMIC HIGHLIGHT
Australia : RBA stuck with its policy rate
NEWS HIGHLIGHTS
Property Sector : Govt softens stance on luxury property freeze
Property Sector : Klang Valley retail occupancy rate at 5-year low
Pharmaniaga : To invest RM100mil in Puchong vaccine plant
YTL Corp : To develop four hotels with Marriott International
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