KUALA LUMPUR (July 13): CIMB Research has upgraded Hong Leong Bank Bhd (HLBB) to “Hold” (from Reduce) with an unchanged target price of RM13.

In a note July 10, the research house said it was upgrading HLBBas we opined that the challenging outlook had been largely priced in following the decline in its share price in 2014 and YTD 2015.

“Furthermore, its CY16 P/E of 9.7x is below the sector’s 10.8x.

“Nevertheless, we believe the operating environment for HLBB will continue to be tough, with constant pressure on its margins and the slowdown in the industry’s loan growth.

“We retain our DDM-based target price (cost of equity of 10.4%, long-term growth of 4%),” it said.

At 9.41am, HLBB rose 0.74% or 10 sen to RM13.58.