KUALA LUMPUR: OSK Research said the share prices of CIMB Group Holdings Bhd, and to a lesser extent MALAYAN BANKING BHD [], have underperformed the KL Finance index due to concerns that their Indonesian units, CIMB Niaga and PT Bank Internasional Indonesia Tbk, may be hit by renewed concerns of inflationary pressure and aggressive interest rate hikes in Indonesia that may dampen loans growth and asset quality.
With the current monetary tightening cycle seen to be gradual and on the back of historically low interest rates amid a stable economic growth outlook, CIMB Niaga and BII's asset quality and loans growth should remain largely intact.
'And any correction in their share prices sparked by further rate hikes in Indonesia that may dampen sentiment on CIMB and Maybank will provide an excellent opportunity to accumulate on weakness. Maintain BUY CIMB (TP: RM9.77) and Maybank (TP: RM10.07),' it said.
With the current monetary tightening cycle seen to be gradual and on the back of historically low interest rates amid a stable economic growth outlook, CIMB Niaga and BII's asset quality and loans growth should remain largely intact.
'And any correction in their share prices sparked by further rate hikes in Indonesia that may dampen sentiment on CIMB and Maybank will provide an excellent opportunity to accumulate on weakness. Maintain BUY CIMB (TP: RM9.77) and Maybank (TP: RM10.07),' it said.
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