KUALA LUMPUR – Foreign investors continued to bolster domestic banking counters as their interest persisted.
Rakuten Trade Sdn Bhd vice-president of equity research Thong Pak Leng said the lifting of travel restrictions spurred more business activities for the financial sector.
“Banks are always the first liners when foreigners buy our stocks. They are stable, safe, fairly good growth and provide good dividend,” he told Bernama.
Thong said foreign funds have been a net buyer on Bursa Malaysia since the past two weeks, while domestic investors were on a profit-taking mood.
CGS-CIMB said foreign fund net bought amounted to RM293 million of equity last week compared to a net sell of RM342 million two weeks ago.
They were net buyers of the healthcare and consumer product sectors.
Local institutional investors were net sellers last week, dumping RM9.5 billion of equities year-to-date.
They were net sellers of the healthcare and financial sectors.
At lunch break, Public Bank rose four sen to RM4.15 with 8.9 million shares transacted and Maybank increased eight sen to RM8.24 with 5.2 million units traded.
CIMB bagged five sen to RM5.05, RHB Bank was 10 sen stronger at RM5.51, and Hong Leong Financial Group gained 28 sen to RM18.18.
Recently listed Bank Islam advanced five sen to RM3.10.
Maybank Investment Bank Bhd said Bank Islam has a strong asset quality, high provision levels and a comfortable capital position, decent valuations, and attractive dividend yields.
Hence, it recommended a buy call on Bank Islam with a target price of RM3.80.
It said Bank Islam also provides investors with exposure to the fourth largest Islamic bank in the country in terms of asset size and the only one that is directly listed on Bursa Malaysia.
“There are several risk factors for our earnings estimates, price target, and rating for Bank Islam. Any slowdown in the domestic economy would have a negative impact on the bank’s earnings, as would a pick-up in deposit rate competition.
“Meanwhile, a deterioration in asset quality, particularly in relation to its exposure to the B40 segment could result in higher-than-expected provision levels,” it said. – Bernama, October 12, 2021
