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WITH a transformation process in place, AMMB Holdings is looking good as an investment option in the local banking sector.
RECENT HARD FIGURES SUCH as resilient loans growth and low non- performing loans (NPLs) are telling enough that Malaysian banks are actually nowhere in the same rut as their counterparts in the developed countries. And these are prompting analysts to upgrade their calls on the local banking sector to their clients. CIMB Research, for one, last month said that it is turning positive on Malaysian banks as the latter have defied expectations of cratering loans growth and spiralling NPLs. In the report, the research house points out the fact that local banks have done surprisingly well in protecting themselves from the fallout of the current economic downturn.
Another bright spot it says in the sector is the prospect of rising investment banking income from the recovery of the capital market. In upgrading the sector from 'neutral' to 'overweight', CIMB Research also says that in addition to the sector's sturdy fundamentals, its rise in weighting in the new FBM KLCI market benchmark index from 25% to 34% is also likely to attract institutional buying interest. In summary, the main re-rating catalysts cited include: (1) better-than-expected loans growth and NPL ratios, (2) revival of earnings growth in 2010, (3) improvement in investment banking …