RHBInvest Research Highlights 03rd October 2011

03rd October 2011

 

Top Story: Market Review – The big slide

Market Update

¨       In the 3Q, the FBM KLCI hit both the all-time high of 1,594.71 (on 8 Jul) and the YTD low of 1,331.80 (on 26 Sep). The benchmark index closed the quarter some 191 points (-12.2%) lower vs. end-2Q, and down 8.7% YTD. The market decline was driven mainly by a loss in investors' confidence in US and EU governments' ability to find solutions to their respective problems. At the same time, disappointing 2Q corporate earnings and news flow fatigue failed to provide any support.

 

Sector Call

 

Construction: MRT to buoy the sector                                        Overweight

Sector update

¨       We have turned positive on the construction sector as there is now even more urgency for the Government to expedite the roll-out of various public projects to pump prime the local economy to shield it against the increased risk of the global economy slipping into a double-dip recession.

 

Banks: Aug '11 system data – Loan growth rebounds               Underweight

Sector Update

¨       Aug '11 system-wide loan growth bounced back up to 13.4% yoy (Jul '11: +12.9% yoy) with loans to businesses expanding by a more robust pace of 14.2% yoy (Jul '11: +13.1% yoy) while household loans growth remained stable mom at 12.7% yoy (Jul '11: +12.8% yoy).

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