KUALA LUMPUR, Dec 5 (Bernama) -- Bursa Malaysia closed lower on Friday amid mixed regional market performance as investors turned cautious over a possible rate hike by the Bank of Japan (BOJ) and upcoming US economic data that may influence the Federal Reserve’s (Fed) interest rate decision next week. At 5 pm, the FTSE Bursa Malaysia KLCI (FBM KLCI) pared most earlier losses to settle 4.55 points easier, or 0.28 per cent, to 1,616.52 from Thursday’s close of 1,621.07. The benchmark index, which opened 0.37 of-a-point lower at 1,620.70, moved between 1,609.67 and 1,621.25 throughout the day. The broader market was negative, with decliners outpacing advancers 604 to 439. A total of 550 counters were unchanged, 1,151 untraded, and 18 suspended. Turnover declined to 3.17 billion units worth RM2.24 billion from 4.48 billion units worth RM2.75 billion yesterday. Rakuten Trade Sdn Bhd vice-presiden...
Malaysia’s banking sector is on track to end 2025 strongly, but analysts caution that tighter liquidity and rising deposit competition will dominate the landscape in 2026.
MBSB Research, which maintained its positive sector outlook, said banks remain supported by robust fundamentals and attractive dividend yields, helping drive a solid 4Q2025 performance.
“Multiple tailwinds continue to support the sector, and we expect share prices to extend their uptrend,” MBSB said in a Wednesday note.
Dividends, loan growth and improving asset quality still supportive
According to MBSB, several factors will continue to underpin bank valuations heading into 2026:
High dividend yields
Improving loan growth momentum
Stable net interest margins (NIMs)
Stronger fee income
Further recoveries in gross impaired loans (GIL)
While risks such as asset quality and liquidity pressures persist, MBSB views them as manageable for now.
However, the house flagged early signs of tightening liquidity based on feedback from “multiple banks”.
“We’re cautious that stronger loan growth in 2026 could drain liquidity faster than expected, bringing back intense deposit competition,” it said.
MBSB also noted that upcoming tariff changes could pressure borrowers by 2H2026, once existing inventory buffers run down. For now, asset quality concerns remain idiosyncratic, not systemic.
MBSB’s top sector picks:
RHB Bank – Buy, TP: RM7.95
Public Bank – Buy, TP: RM5.05
Kenanga: Reward banks that can deploy capital efficiently
Kenanga maintained its “overweight” call on the banking sector, emphasising that in a slower growth environment, investors should favour banks with disciplined capital deployment.
Its top picks include:
AMMB Holdings (AMMB)
Outperform; TP: RM6.90
Rising earnings growth and return on equity
Improving dividend trajectory, distinguishing it from other high yielders
Malayan Banking (Maybank)
Outperform; TP: RM11.30
Large-cap preferred pick
Market leadership provides scale advantages and product flexibility
Better-than-industry GIL and stable ~6% dividend yield
NBFI Spotlight: Takaful Malaysia
Within the non-bank financial institution space, Kenanga highlighted:
Syarikat Takaful Malaysia Keluarga (Takaful)
Outperform; TP: RM4.40
Strong growth in credit-related products
Renewed bancatakaful tie-up with RHB Bank
Higher dividend expectations (≈6%) appealing to Shariah-focused yield investors
CIMB Downgraded
Kenanga noted it recently downgraded CIMB Group to “market perform”, stating that while its special dividends boosted yield sentiment, they may also reflect more conservative capital deployment as the bank works toward its longer-term Forward30 goals.
Comments
Post a Comment