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FEATURE
CALLS
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Malaysia | Malaysia Banking
2016 loan growth
in-line, expect slower growth in 2017
Desmond Ch'ng
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Regional | Macau Gaming
Weak Jan GGR
despite strong visitation
Samuel Yin Shao
Yang
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SECTOR RESEARCH
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2016 loan growth in-line, expect slower growth in
2017
by
Desmond Ch'ng
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2016 industry loan growth ended the year in-line with
our full-year forecast, at 5.3% YoY. With the contraction in loan
applications and approvals throughout the year, we expect loan growth
to further moderate in 2017 and maintain our industry loan growth forecast
of 4.7%. We maintain our BUY calls on BIMB, AFG and HL Bank.
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Weak Jan GGR despite strong visitation
by
Samuel Yin Shao Yang
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Jan GGR was below our and consensus estimates despite
a strong CNY visit arrivals number. We believe the miss was caused by
players mix and luck factor. We forecast Feb 17 GGR to be flattish
YoY. The sector is trading at fair valuations. Maintain NEUTRAL sector
view.
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Samuel Yin
Shao Yang
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Sonija Li
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MACRO RESEARCH
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Equity flows & lookouts
by Chew
Hann Wong
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Foreign investors bought a net e.MYR0.4b of Malaysia
equities in Jan 2017 after being net sellers for four consecutive
months from Sep 2016. The amount of net buy was however small,
similar to that in Feb/Apr 2016. Cumulative foreign net buy since
early-2010 rose slightly to e.MYR4.5b end-Jan 2017, but still
significantly below a high of MYR49.4b end-May 2013. We retain our
view that the downside for Malaysia equities from foreign selling
should be limited, barring another global rout.
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Slow & steady growth but liquidity risk from
foreign bond holdings…?
by
Suhaimi Ilias
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Money supply (M3) grew +3.0% YoY in Dec 2016 (Nov
2016: +2.9% YoY), supported by faster growth in the business sector
loans amid slower household loans and total deposit growth. Liquidity
issue or risk this year revolves around foreign holdings of bonds, although
there is sufficient domestic dry powder to absorb selloffs.
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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: Fed nods to improved sentiment while leaving rates
unchanged. Federal Reserve officials left interest rates unchanged while
acknowledging rising confidence among consumers and businesses following
Donald Trump’s election victory. “Measures of consumer and business
sentiment have improved of late,” the Federal Open Market Committee said
in its statement following a two-day meeting in Washington. Policy makers
reiterated their expectations for moderate economic growth, “some further
strengthening” in the labor market and a return to 2% inflation. The Fed
provided little direction on when it might next raise borrowing costs, as
officials grapple with the uncertainty created by a new presidential
administration. Policy makers in December penciled three rate hikes into
their 2017 forecasts, but committee members differ over assumptions
regarding the extent to which tax cuts, spending and regulatory rollbacks
proposed by Trump and Republicans might boost growth and inflation.
(Source: Bloomberg)
U.S: Manufacturing accelerates for a fifth straight month
in January on stronger orders and production that signal America’s
factories are rebounding. The Institute for Supply Management’s index
rose to 56, the highest since November 2014, from 54.5 the prior month, data
from the Tempe, Arizona-based group showed. The report showed the gauges
of production and orders also climbed to more than two-year highs,
underscoring sustained improvement in manufacturing following a soft
patch in mid-2016. Stronger demand is helping drive up costs of raw
materials, as a measure of prices paid jumped to the highest since May
2011, adding to signs of inflation picking up worldwide. (Source:
Bloomberg)
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Other News:
Kerjaya Prospek: Eyes MYR800m new jobs this year. The
group hopes to secure more construction jobs to meet its internal
replenishment order book target of MYR800m for the current year ending
Dec 31, 2017, according to its executive chairman Datuk Tee Eng Ho. The
group currently has 19 on-going construction jobs. Kerjaya Prospek
ventured into infrastructure works last March after securing a dredging
works contract from China Communication Construction Company that was
worth MYR1813.31m for the Seri Tanjung Pinang development in Penang. The
job is expected to be completed by March 18,2018. (Source: The Edge
Financial Daily)
Petronas Dagangan: Sale of Vietnam indirect unit hits
snag. Its wholly-owned subsidiary PDB (Netherlands) BV said yesterday
Totalgaz Vietnam LLC has terminated the sale and purchase agreement (SPA)
to acquire Petronas Dagangan’s entire 100% equity interest in Thang Long
LPG Co Ltd. On Dec 11, 2015, Petronas Dagangan through PDB (Netherlands)
entered into two SPAs with Totalgaz Vietnam to divest its 100% equity
interests in indirect units Petronas (Vietnam) Co Ltd and Thang Long LPG,
in a move to rationalise Petronas Dagangan’s portfolio. (Source: The Sun
Daily)
Petronas Dagangan: Sale of Vietnam indirect unit hits
snag. Its wholly-owned subsidiary PDB (Netherlands) BV said yesterday
Totalgaz Vietnam LLC has terminated the sale and purchase agreement (SPA)
to acquire Petronas Dagangan’s entire 100% equity interest in Thang Long
LPG Co Ltd. On Dec 11, 2015, Petronas Dagangan through PDB (Netherlands)
entered into two SPAs with Totalgaz Vietnam to divest its 100% equity
interests in indirect units Petronas (Vietnam) Co Ltd and Thang Long LPG,
in a move to rationalise Petronas Dagangan’s portfolio. (Source: The Sun
Daily)
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