Malaysian Banks' Bond Valuation Pressure Likely to Ease in 4Q
Dow Jones
Yesterday
0506 GMT - Malaysian banks could face weaker fixed-income securities portfolio valuations in 3Q as local bond yields remain elevated following the U.S. rate hike, but the impact is expected to ease in 4Q,Kenanga Investment Bank analyst Peter Kong and his team say in a note. Malayan Banking, Hong Leong Bank and Alliance Bank Malaysia are viewed as relatively less exposed to bond-market swings. "This is a short term view," they say. Fundamentally, banks with good control of funding costs are expected to be able to tap a healthy loan growth pipeline, supporting their preference for Malayan Banking and Hong Leong Bank. Kenanga expects Bank Negara's policy rate to remain unchanged for now.
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