KUALA LUMPUR (Mar 1): Investors should build positions in Malaysian bank stocks as quarterly earnings misses prompt a short-term pause in the recent rally, JPMorgan analysts including Harsh Wardhan Modi write in report.
* 12-month bullish investment case remains intact; outlook for EPS growth in 2018-19 has improved
* Latest quarter saw more misses than beats, but should be seen as a relief as most were driven by last round of non-performing loan clean-up
* Loan and net interest margin guidance expected to be conservative, which opens up scope for consistent EPS revisions in course of year; rate hike last month will start showing up in NIMs this quarter
* Credit growth should move close to 10% this year vs 4% last year
* CIMB +42%, Maybank +21%, Public Bank +15% in past 12 months vs +9.4% for KLCI