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STOCKS NEWS MALAYSIA-Kenanga cuts RHB Capital to 'market perform'
May 30, 2013 / 2:37 AM / 4 years ago

STOCKS NEWS MALAYSIA-Kenanga cuts RHB Capital to 'market perform'

Kenanga Research cut its call on RHB Capital Berhad to “market perform” from “outperform” on the back of a weaker first quarter and a limited earnings growth outlook at the country’s fourth largest lender.

RHB’s profit after tax (PAT) of 357.2 million ringgit ($116 million) was 18 percent below the consensus forecast as it was dragged down by higher loan-loss charges, Kenanga said in a note on Thursday.

“The higher-than-expected credit charge-off rate of 55 basis points was the major disappointment during the quarter,” Kenanga said.

Kenanga, however, added that the group could still achieve its full-year return on equity (ROE) target of 13 percent due to its “determination in extracting synergies from its merger with OSK Investment Bank, and containing its cost-to-income ratio to 50 percent”.

Kenanga lifted its target price on RHB shares to 9.20 ringgit from 8.30 ringgit after adjusting its valuations to the financial year of 2014.

Shares in RHB slipped 1.13 percent against the Malaysian benchmark stock index’s 0.50 percent loss.

1026 (0226 GMT) (Reporting by Anuradha Raghu; Editing by Gopakumar Warrier) (anuradha.raghu@thomsonreuters.com)(Reuters Messaging: anuradha.raghu.thomsonreuters.com@reuters.net)

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1016 STOCKS NEWS MALAYSIA-Malaysian Airline slips nearly 5 pct on weaker Q1

Shares in Malaysian Airline System Bhd (MAS), the country’s national carrier, slipped as much as 4.94 percent on Thursday after the company posted a wider first-quarter net loss, hurt by foreign exchange losses and finance costs.

MAS on Wednesday reported a 278.8 million ringgit ($90.52 million) loss in the three months ended March, compared with 171.8 million ringgit net loss a year earlier.

The company said added capacity in the market, increased competition and continued high jet fuel prices have placed pressure on yields.

“Results were below our and street expectations, as we expected MAS to post a full year net profit of 189 million ringgit,” Affin Investment Bank said in a note to clients on Thursday.

Affin cut its rating on MAS to “sell” from “trading buy”, and lowered its target price to 0.29 ringgit per share from 0.35 ringgit.

As of 0159 GMT, shares in MAS had fallen 3.7 percent against the Malaysian benchmark stock index’s 0.44 percent loss.

1000 (0200 GMT) (Reporting by Anuradha Raghu; Editing by Anupama Dwivedi) (anuradha.raghu@thomsonreuters.com)(Reuters Messaging: anuradha.raghu.thomsonreuters.com@reuters.net) ($1 = 3.0800 Malaysian ringgit) ($1 = 3.0800 Malaysian ringgits)

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