MONEY MASTER

Maintain Neutral, Public Bank as top pick The 4Q15 results season, while mixed, reinforces our view that sector ROE has yet to bottom out with most banks guiding for lower ROEs ahead. We continue to see a challenging environment ahead for banks with: i) asset growth likely constrained by tighter liquidity and soft macroeconomic conditions, ii) NIMs still under pressure, iii) capital markets yet to recover meaningfully, and iv) higher credit costs ahead – all of which should keep bottomline growth muted, in our view. We keep our NEUTRAL sector call. Banking sector 4Q15 a mixed quarter for the banks . Three out of the seven banking stocks that we cover reported results that were in line with our estimates. Affin and Hong Leong Bank (HL Bank) both missed our and consensus estimates with the main variances being weaker-than-expected associate contribution (Affin and HL Bank) and lower-than-expected net interest margin (NIM) (HL Bank). CIMB’s results were in line with our expe...

http://money-made-ez.blogspot.my/2016/01/stock-pick-uchi-technologies-bhd.html Maintain Neutral, Inari and Scicom remain top pick Sector earnings momentum remains positive both on a yoy and qoq basis. Earnings growth, however, continues to be underpinned by a weaker currency rather than operational factors. Concerns over an inventory imbalance and the possible strengthening of the RM are also valid. We maintain our Neutral stance and are selectively positive on  stocks  that can offer real growth. For sector exposure we like Inari and Scicom. 2015 broadly in line with expectations Calendarised 2015 core earnings for the technology sector jumped 54% yoy underpinned by both revenue growth and margin expansion. The strong earnings growth was nevertheless aided by the average 19%  depreciation  of the RM vis-à-vis the US$ during the year. Intuitively, judging by the revenue growth of 15% yoy in RM terms, impact from organic growth was largely muted. Thi...