Lotte Chemical Titan Holding : Lotte Chemical Titan takes nosedive

SECTOR FOCUS OF THE DAY

Banking Sector : Rebound in business loans                                                         OVERWEIGHT

Loan growth for the industry picked up pace to 5.7%YoY, an improvement of 20bps from the preceding month due to a rebound in business loans while growth in household loans moderated slightly.  Industry loan growth improved to 5.7%YoY in June 2017 from 5.5%YoY in May 2017. This was contributed by a stronger pace of non-household loans while household loan growth slipped marginally from the previous month.

By loan purpose, there has been a stronger momentum in working capital loans while household loan growth remained slow, particularly credit for purchase of passenger cars and property. Growth in loans for purchase of residential property improved slightly to 8.9%YoY in June 2017 while loans for purchase of non-residential property continued slide, declining to 3.8%YoY. This reflected banks’ cautious stance in lending for purchase of commercial properties. Maintain OVERWEIGHT with BUYs on RHB Bank (FV: RM6.00/share) and Public Bank (FV: RM22.20/share). We downgrade our call for Hong Leong Bank to HOLD from BUY with an unchanged fair value of RM15.20/share due to its recent strong share price performance. We see Hong Leong Bank as fairly valued at FY18 P/BV of 1.3x on the back of an ROE of 10.3%.

Others :

Axiata Group : XL revenue growth gains traction                                               BUY

Malaysia Airports : Strong overall performance                                                  HOLD

QUICK TAKE

CIMB Group : Improvement in Niaga’s interest income and credit cost                   HOLD

STOCKS ON RADAR

Sig Gases, Rohas Technic, YSP Southeast Asia Hldg, Yoong Onn Corp. 

ECONOMIC HIGHLIGHT

Malaysia : PPI suggests business cost has eased

NEWS HIGHLIGHTS

Lotte Chemical Titan Holding : Lotte Chemical Titan takes nosedive

Mudajaya Group : Mudajaya Group bags two Rapid jobs worth RM151m

Public Bank : Public Bank’s Teh to step down as chairman

WMG Holdings : WMG to expand landbank after successful listing

DISCLAIMER:

The information and opinions in this report were prepared by AmInvestment Bank Bhd. The investments discussed or recommended in this report may not be suitable for all investors. This report has been prepared for information purposes only and is not an offer to sell or a solicitation to buy any securities. The directors and employees of AmInvestment Bank Bhd. Bhd may from time to time have a position in or with the securities mentioned herein. Members of the AmBank Group Bhd and their affiliates may provide services to any company and affiliates of such companies whose securities are mentioned herein. The information herein was obtained or derived from sources that we believe are reliable, but while all reasonable care has been taken to ensure that stated facts are accurate and opinions fair and reasonable, we do not represent that it is accurate or complete and it should not be relied upon as such. No liability can be accepted for any loss that may arise from the use of this report. All opinions and estimates included in this report constitute our judgment as of this date and are subject to change without notice.