SECTOR FOCUS OF THE DAY
Banking : Industry loans likely to accelerate in final months of 2017 OVERWEIGHT
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 :
UMW Oil & Gas : No re-rating from short-term Naga 4 charter HOLD
Oil & Gas : Mixed report card amid slow recovery NEUTRAL
STOCKS ON RADAR
Guan Chong, Chin Well Holdings, Hai-O Enterprise, Xin Hwa Holdings
ECONOMIC HIGHLIGHT
Thematic/Strategy : A look at key indicators of Asean-5 GDP growth
NEWS HIGHLIGHTS
Cypark : To build solar PV plant in N Sembilan
Glove Sector : Glove makers to raise prices, expect record revenue of RM16.2b
Building Material Sector : Gas price hike to raise steelmakers' costs by RM200m a year
Sime Darby : Newly listed units remain under pressure
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