Stock to pick today
KUALA LUMPUR – CIMB Research has maintained its Neutral rating on the banking sector and said opposition alliance Pakatan Rakyat had vowed to lower car duties if it wins the next election.
The research house in a note Monday said that a consequential drop in car prices would be negative for banks due to (1) slower growth in auto loans, and (2) higher credit costs resulting from the lower resale value for cars.
“Even without the lowering of car duties, we are concerned about weaker loan growth and margin squeeze affecting Malaysian banks.
“As such, the sector remains a Neutral despite undemanding CY13 P/E of 10.8x valuation and attractive yield. Maybank is still our top pick,” it said.
-By The Edge Malaysia