Skip to main content

Featured Post

Market Daily Report: Bursa Malaysia Closes Higher On BNM’s OPR Decision, Wall Street Gains

KUALA LUMPUR, Nov 5 (Bernama) -- Bursa Malaysia closed higher, buoyed by Bank Negara Malaysia’s (BNM) decision to maintain the Overnight Policy Rate (OPR) at 2.75 per cent, alongside positive cues from Wall Street. At 5 pm, the FTSE Bursa Malaysia KLCI (FBM KLCI) rose 19.30 points, or 1.19 per cent, to 1,635.86 from Wednesday’s close of 1,616.56. The benchmark index opened 6.72 points higher at 1,623.28, and fluctuated between an intraday high of 1,642.44 and a low of 1,622.62 during the trading session. However, market breadth was negative, with losers outnumbering gainers 723 to 497, while 466 counters were unchanged, 1,075 untraded and 10 suspended. Turnover rose to 3.74 billion units valued at RM3.61 billion compared with yesterday’s 2.81 billion units valued at RM2.57 billion.
Post a Comment

Brokers Report: Affin Holdings - Results above due to slower provision

Retain HOLD with unchanged target price (TP) of RM2.12


Results

  • Above expectations. Reported 3Q16 net profit of RM141m (+38.1% YoY, +2.9% QoQ), bringing 9M16 net profit to RM394.3m (+45% YoY). This is marginally ahead of HLIB full year forecast (81.8%) but well above consensus forecast (86.8%).

Deviations

  • Slower provision.

Dividend

  • Declared 1st interim dividend of 3 sen vs. 2.99 sen in 9M15, translating into RM58.3m or 15% payout ratio.

Highlights

  • 3Q16… Net profit grew strongly to RM141.4m (+38.1% YoY, +2.9% QoQ) on the back strong contribution from NOII of RM170m (+14.2% YoY, +3.6% QoQ), driven mainly by sales of financial instruments. Provisions continued to slow to - RM3.5m due to higher CA writeback and slower IA which offset the slower recoveries.
  • 9M16… Net profit surged to RM394.3m (+45% YoY) chiefly due to reversal of provision amounting -RM4.1m (-97.6% YoY). Decline in provisions was attributed to lower IA of RM47.8m (-377% YoY) and IA writeback of -RM33.6m (+641% YoY).
  • Loans were marginally bettered by 1.8% YoY. However on YTD, loans declined by 1.7%, due to contraction in loans for working capital by 10.4% YTD while Affin was continuing its focus on mortgage segment. NII grew 2.4% YoY driven from higher NIM of 1.94% despite escalating fixed deposits. Note that in 1H16 management replaced RM1.6bn loans with better yield loans.
  • Deposits outpaced industry, grew by 6.3% YoY driven by fixed deposits by 5.8% YoY. However, CASA dropped by 8% YoY. The expansion in deposits helped to lower LDR to 86.5% from 91.9% in 1H16.
  • Asset quality worsened slightly with GIL rising to 2.08% vs. 1.98% in 1H16 (from working capital and hire purchase segments). Credit charge trended higher to 0.8bps in 3Q16 from 0.5bps 2Q16 due to higher writeback and lower IA while LLC fell to 59.7% due to higher gross impaired.

Risks

  • Unexpected jump in impaired loans and declining loan growth. Intense competition from bigger players.

Forecasts

  • We maintain our forecasts.

Rating

HOLD (↔)
  • Despite encouraging results, we believe the NOII performance will not be sustained due to Ringgit volatility. Hence, we expect Affin’s earnings to normalize in 4Q and meet our full year forecast. Additionally, we expect normalization in its loan growth due to rising effort in the SME and corporate segment.

Valuation

  • Maintain HOLD recommendation. With unchanged target price of RM2.12 based on ROE of 5.6% and WACC of 8.3%.


Source: Hong Leong Investment Bank Research - 01 December 2016
Labels:

Comments

Post a Comment

Popular posts from this blog

US October Jobs and CPI May Never Be Published, White House Warns as Shutdown Disrupts Data Pipeline

The White House said Wednesday that the October US jobs report and consumer price index are unlikely to be released, marking an unprecedented disruption to America’s economic data system as the government shutdown continues. Press Secretary Karoline Leavitt confirmed that key statistical agencies — including the Bureau of Labor Statistics — halted data collection and publication when the shutdown began, leaving policymakers without crucial indicators needed to assess the economy’s momentum. While some datasets could be reconstructed retroactively, economists have cautioned that the CPI and unemployment rate are among the releases most at risk of being skipped entirely. The BLS has not issued an updated calendar or indicated whether missing releases might be combined into future reports. In previous shutdowns, the agency has restored operations quickly, but officials now face the challenge of incomplete surveys that cannot be reproduced after the fact. Leavitt said Democrats “may have p...
Post a Comment
Read more

EU Seeks Assurances from US Over AT1 Bond Wipeouts in Future Bank Failures

Europe’s top bank resolution official is seeking clarity from the United States to ensure that  US regulators will not obstruct write-downs of Additional Tier 1 (AT1) bonds  during future bank failures, a crucial mechanism used to safeguard financial stability. Background: Lessons from Credit Suisse Dominique Laboureix, chair of the  Single Resolution Board (SRB) , said in an interview that the issue has been raised at the  Financial Stability Board (FSB) , where a working group is “seriously” addressing potential cross-border obstacles. The move follows lingering uncertainty since the  2023 collapse of Credit Suisse , where  AT1 bondholders were fully wiped out  to facilitate the bank’s rescue. With the  Trump administration’s reorientation of US regulatory priorities , European officials are now seeking renewed assurance that Washington will continue to uphold global resolution standards. “You cannot achieve 100% comfort all around the globe wit...
Post a Comment
Read more

特朗普考虑保罗·阿特金斯接任SEC主席，或推动加密货币监管转型

据彭博社报道，美国候任总统唐纳德·特朗普正在考虑由 保罗·阿特金斯 （Paul Atkins）接替即将卸任的证券交易委员会（SEC）主席 加里·根斯勒 （Gary Gensler）。阿特金斯以其支持数字资产的立场闻名，这一任命可能为SEC的加密货币监管政策带来重大转变。 事件概况 阿特金斯的背景 ： 阿特金斯曾在乔治·W·布什政府期间担任SEC专员。他一直推动制定明确且平衡的加密货币法规，力求为金融科技创新提供支持。 行业经验 ： 离开SEC后，阿特金斯领导了 Patomak Global Partners ，一家为主要金融公司提供咨询的机构。他主张简化监管流程以鼓励创新，同时确保市场完整性。 其他候选人 ： 马克·乌耶达 （Mark Uyeda）：现任SEC专员 希斯·塔伯特 （Heath Tarbert）：前商品期货交易委员会（CFTC）主席 罗伯特·斯特宾斯 （Robert Stebbins）：Willkie Farr & Gallagher LLP合伙人 特朗普的亲加密货币立场 特朗普承诺终结根斯勒领导下的SEC“反加密货币运动”。根斯勒的任期因FTX崩盘等丑闻后的强力执法而备受争议，被批评为给行业带来了不确定性。 阿特金斯的潜在任命与特朗普的目标一致，即在保障市场完整性的同时，通过更加友好的监管政策推动数字资产的发展。 接下来会发生什么？ SEC主席的任命预计将在未来几天内敲定。如果阿特金斯接任，这将表明SEC将采取更注重创新的监管方式，为加密货币行业带来更大的确定性和发展空间。
Post a Comment
Read more