Monday, March 21, 2011

Banks drag FBM KLCI into the red

KUALA LUMPUR: Banks fell in early trade on Monday, March 21 after Bank Negara Malaysia announced a number of new measures for the credit card industry to encourage more prudent financial management among credit card users.

At 9.10am, the FBM KLCI fell 4.01 points to 1,499.88. Turnover was 45.38 million shares valued at RM33.7 million. There were 137 gainers, 64 losers and 100 stocks unchanged.

RHB Cap fell the most, down 20 sen to RM7.80 with just 100 shares done. Pubpic Bank sehd six sent to RM12.96, Public Bank foreign four sen to RM12.96 while also down four sen each were AMMB and Maybank to RM6.33 and RM8.67.

PLANTATION []s also slipped, with Kwantas down 10 sen to RM2 and heavyweight IOI Corp five sen to RM65.73. Power giant Tenaga shed eight sen to RM6.12.

OSK Research is maintaining its Buy on the banking sector as loans growth remains largely intact at a forecast at 9% to 10%.

It said the boost from the Economic Transformation Programme related loans and fixed income securities has yet to be imputed into its loans and non-interests income growth assumptions.

'Loans loss provisions are expected to continue on a downtrend on the back of improving asset quality. The key risk lies in larger than expected margin pressure, sustained weakness in the capital markets and sudden surge in foreign hot money outflow from Malaysian government securities, which will affect banks' bond trading profits as a result of a spike in bond yields,' it said.

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