KUALA LUMPUR, Feb 16 (Bernama) -- Maybank Investment Bank Bhd (Maybank IB) maintains a positive stance on the Malaysian banking industry, citing attractive sector valuations.
In a note today, the research firm said banking sector price earning ratios (PERs) (on a one-year forward rolling basis) are currently hovering close to pandemic valuation levels, which it believed is unjustified.
“Banking stocks in our coverage currently trade at an average PER valuation of just 9.3 times, which is close to the pandemic trough PER of 8.3 times in Oct 2020.
“Average valuations are even lower than the long-term -1SD (standard deviation) to mean PER of 10.1 times,” said Maybank IB.
It said the sector’s return on equity is also expected to average 10 per cent amid earnings growth of 5.8 per cent/6.5 per cent in 2024/25E and dividend yields averaging about five per cent.
“We remain positive on the sector with ‘buy’ calls on AMMB Holdings Bhd, CIMB Group Holdings Bhd, Public Bank Bhd, Alliance Bank Malaysia Bhd, Hong Leong Bank Bhd and Hong Leong Financial Group Bhd,” said Maybank IB.
-- BERNAMA
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