Likely halt to Malaysian banks’ re-rating

RAM Ratings

PETALING JAYA: The impending MSCI Index semi-annual rebalancing and weak earnings will halt a re-rating on the banking sector, according to one research house.

Deutsche Bank AG Hong Kong downgraded the country’s largest bank, Malayan Banking Bhd (Maybank), to a “sell” from a “buy” and cut its target price for it by 25% to RM7.40, on the basis of what it describes as weakness in revenue that could hurt the prospects of its return on equity (ROE).