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Top Calls
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Company Update � Public Bank (REDUCE,
maintain)
- Still business-as-usual Despite the sustainability of PBB�s market share, we reiterate our REDUCE rating on the stock as we believe that PBB's valuations look pricey on a PBV basis at 3.1x 2014E and 2.8x 2015E and meanwhile, ROEs are on a declining trend from its high of 25-28% in 2006-11 to 19-20% for FY14-16E. On a dividend angle, large-cap peers such as Maybank (MAY MK, BUY, Price Target RM12.00) which offer better dividend yields of 5.6% while benefiting from a stronger ASEAN footing, in our view. We also lower our price target from RM18.00, to RM17.70 given the 3% downward revision in FY15E earnings as we have raised our deposit growth to 10-11% as well as increased PBB�s funding cost arising from the aggressive campaigns on deposit. Meanwhile, management continued to guide a firm loan growth target of 10-11% for FY14E, which is above industry trends.
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Other Calls
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Flash Note � Genting Plant (ADD,
maintain)
- Collaboration to produce high value palm oil derivatives
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Economy � US Outlook � Weekly Wrap (7 � 11 July 2014)
- US Fed likely to end bond buying program later this year
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