MARKET DEVELOPMENT
Banks, Plantations Hurt By Selldown
Banks, Plantations Hurt By Selldown
15/03/2014 (The Star) - Banks and plantation stocks were among the major losers at the close of trading on Friday as investors avoided riskier assets ahead of the referendum in Crimea over the weekend and a slowdown in China's economy.
Banks, viewed as a proxy of the economy, retreated on expectation of a slowdown with CIMB Group, Public Bank and AMMB among the major decliners in the 30-stock KLCI.
At close, the KLCI was down 13.74 points to 1,805.12. Turnover was 1.37 billion shares valued at RM2.08bil. Gainers beat draggers 210 to 543 while 331 counters remained unchanged.
CIMB fell nine sen to RM7 and erased 1.58 points from the KLCI while Public Bank lost 12 sen to RM18.92 and wiped out 1.22 points. AMMB lost 15 sen to RM6.96 and Hong Leong Bank two sen to RM14.08 whulle Maybank shed one sen to RM9.50.
MIDF Equities Research is maintaining its Neutral outlook on the bank sector. It is expecting 2014 loan growth of 10%-11% on the back of a GDP growth forecast of 5.0%.
In a recent report on the sector, it said exports and private sector investments have been seen gaining traction. It continues to expect business loan growth to trend higher than CY13 on the back of improvement in external trade of Malaysia.
"Meanwhile, we continue to expect consumer loans growth to moderate in 2014 due to higher inflation and the tightened measures by Bank Negara to manage household debts.
"Also, property measures announced in the Budget 2014 which took effect this year to cool down the property market are also expected to moderate consumer loan growth," it said.
Some banks had turned more cautious on lending for purchase of commercial properties, said MIDF Research.
Plantation stocks also fell on Friday, weighed by the weaker investor sentiment, with crude palm oil for third month falling RM29 to RM2,780 which was one of the more notable declines since late February.
KL Kepong sank 18 sen to RM23.76, PPB Group down 12 sen to RM 16.08 and Batu Kawan fell 10 sen to RM19.60. Heavyweight Sime Darby fell seven sen to RM9.14 and IOI Corp, down three sen to RM4.70. Timber and plantations-based Ta Ann slid five sen to RM4.41.
However, Genting Plantations gained 14 sen to RM10.70.
Forecasts for rain in Malaysia eased concern about a prolonged dry spell, analysts said.
"Production is still in the downward cycle, but there may be some recovery in March," RHB Investment Bank deputy of futures and commodities Donny Khor told Bloomberg.
RHB Research was upbeat on plantations and it maintained its Overweight outlook as it expects better quarters ahead on the back of rising CPO prices and lower production costs.
"We believe this is still the early stage of a bull market, as funds have just started to flow into the palm oil sector and valuations remain inexpensive. Our Top Picks in Malaysia include IOI Corp, Sarawak Oil Palms and Jaya Tiasa," it said.
Banks, viewed as a proxy of the economy, retreated on expectation of a slowdown with CIMB Group, Public Bank and AMMB among the major decliners in the 30-stock KLCI.
At close, the KLCI was down 13.74 points to 1,805.12. Turnover was 1.37 billion shares valued at RM2.08bil. Gainers beat draggers 210 to 543 while 331 counters remained unchanged.
CIMB fell nine sen to RM7 and erased 1.58 points from the KLCI while Public Bank lost 12 sen to RM18.92 and wiped out 1.22 points. AMMB lost 15 sen to RM6.96 and Hong Leong Bank two sen to RM14.08 whulle Maybank shed one sen to RM9.50.
MIDF Equities Research is maintaining its Neutral outlook on the bank sector. It is expecting 2014 loan growth of 10%-11% on the back of a GDP growth forecast of 5.0%.
In a recent report on the sector, it said exports and private sector investments have been seen gaining traction. It continues to expect business loan growth to trend higher than CY13 on the back of improvement in external trade of Malaysia.
"Meanwhile, we continue to expect consumer loans growth to moderate in 2014 due to higher inflation and the tightened measures by Bank Negara to manage household debts.
"Also, property measures announced in the Budget 2014 which took effect this year to cool down the property market are also expected to moderate consumer loan growth," it said.
Some banks had turned more cautious on lending for purchase of commercial properties, said MIDF Research.
Plantation stocks also fell on Friday, weighed by the weaker investor sentiment, with crude palm oil for third month falling RM29 to RM2,780 which was one of the more notable declines since late February.
KL Kepong sank 18 sen to RM23.76, PPB Group down 12 sen to RM 16.08 and Batu Kawan fell 10 sen to RM19.60. Heavyweight Sime Darby fell seven sen to RM9.14 and IOI Corp, down three sen to RM4.70. Timber and plantations-based Ta Ann slid five sen to RM4.41.
However, Genting Plantations gained 14 sen to RM10.70.
Forecasts for rain in Malaysia eased concern about a prolonged dry spell, analysts said.
"Production is still in the downward cycle, but there may be some recovery in March," RHB Investment Bank deputy of futures and commodities Donny Khor told Bloomberg.
RHB Research was upbeat on plantations and it maintained its Overweight outlook as it expects better quarters ahead on the back of rising CPO prices and lower production costs.
"We believe this is still the early stage of a bull market, as funds have just started to flow into the palm oil sector and valuations remain inexpensive. Our Top Picks in Malaysia include IOI Corp, Sarawak Oil Palms and Jaya Tiasa," it said.