KUALA LUMPUR, July 29 (Bernama) -- Bursa Malaysia rebounded to close higher on Wednesday on selective buying of defensive stocks after a volatile trading session. IPPFA Sdn Bhd director of investment strategy and country economist Mohd Sedek Jantan said consumer products and services stocks lifted the key index higher, overcoming lingering geopolitical concerns. At 5 pm, the FTSE Bursa Malaysia KLCI (FBM KLCI) rose 3.08 points to 1,715.56 from yesterday’s close of 1,712.48. The benchmark index, which opened 1.91 points higher at 1,714.39, moved between 1,710.79 and 1,720.59 during the day’s trading. In the broader market, gainers outstripped decliners 550 to 476, while 612 counters were unchanged, 1,129 untraded, and 48 suspended. Turnover rose to 2.96 billion units valued at RM2.48 billion from 2.94 billion units valued at RM2.56 billion on Tuesday.
Profit Matches Forecasts Despite Margin Pressure
Oversea-Chinese Banking Corp (OCBC), Singapore’s second-largest lender, reported a second-quarter net profit of S$1.82 billion, down 7% from a year earlier, in line with analyst expectations. The decline was primarily driven by softer net interest income as margin compression continued to weigh on profitability.
Key Financial Highlights
Net Interest Margin (NIM): Dropped to 1.92% from 2.20% in 2Q24.
Net Interest Income Outlook: 2025 guidance lowered to a mid-single-digit percentage decline, with NIM expected in the 1.90%-1.95% range versus ~2% previously.
Non-Interest Income: Grew 5% YoY on stronger fee and trading income.
Wealth Management: Assets under management rose 11% to a record S$310 billion, supported by net inflows and positive market performance.
Dividend: Interim ordinary dividend maintained at 41 Singapore cents.
CEO Transition Amid Challenging Outlook
Group CEO Helen Wong flagged a “challenging” macro environment driven by evolving trade policies, monetary tightening, and persistent geopolitical tensions. Wong, OCBC’s first female chief executive, will retire at year-end, with Tan Teck Long, head of global wholesale banking, set to take over.
Sector Context
OCBC is the first among Singapore’s local banks to report this season. The results come after mixed performances from global peers: Standard Chartered delivered a 26% rise in 1H profit on strong wealth and markets businesses, while HSBC missed estimates due to China and Hong Kong-related write-downs.
Analyst Takeaway:
The downgrade to 2025 net interest income guidance reflects the ongoing squeeze on margins, a key headwind for Singapore banks as global rates peak. However, OCBC’s record wealth AUM and diversified fee income provide partial buffers. Investors will now watch DBS and UOB results on Aug 7 for further read-throughs on the sector’s trajectory.
Comments
Post a Comment