PETALING JAYA: Malayan Banking Bhd
(Maybank) shares had a horrid year in 2014, being the worst-performing stock in the banking sector.
Morgan Stanley Research said investors should pick up the stock at current levels.
“We have an ‘overweight’ recommendation on the stock, as we believe it will be a big beneficiary of any capital market recovery in 2015,” said its research team in an Asean financials note.
It said that while the outlook for 2015 remained difficult, it saw a lot being discounted in Maybank’s share price at a 12.2 times forward price-to-earnings ratio and 1.7 times price-to-book ratio.
Despite its bullish outlook on Maybank, Morgan Stanley Research said Malaysian banks were likely to continue underperforming their Asean peers, with oil prices as the wild card.
The research firm said Public Bank Bhd was its least preferred stock as its business, which is skewed towards retail customers, would see slower earnings per share growth.
“(This is because) concerns over high household indebtedness remain an overhang,” it said, adding that it had an “even-weight” recommendation on the stock.
Morgan Stanley Research said it expected Malaysia and Thailand to be the most difficult markets from an operational point of view this year.
It maintains an “underweight” rating on the low-return Bangkok Bank despite its low valuation multiples.
It said growth would improve from 2014 onwards but still remained subdued from 2012 to 2013 levels, and advised investors to focus on banks with high and stable returns.
It said the Philippines was the best-positioned market due to its ample liquidity, strong forecast gross domestic product growth and low levels of credit penetration, adding that it saw value in Metrobank.
It sees Singapore and Indonesia as the next best-positioned, and prefers the higher-return PT Bank Central Asia Tbk and PT Bank Mandiri Tbk in Indonesia.
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