Tuesday, 21 February 2012

'Upside earnings surprises in store'

from Business Times

Analysts said expectations on banks to deliver a good set of numbers in their upcoming quarterly financial results had also helped to drive banking stocks up. "As illustrated by the BNM's latest statistics for December, loan growth and asset quality of the domestic banking sector have remained strong. We foresee that there may be some upside surpri-ses on the ongoing fourth quarter calendar year 2011 results to be announced by the banks," said Cheah. The reduction of China's reserve requirement ratio has also boosted investors' optimism on the stock market. "Such easing policy will be a great boost for the market, as it will improve the market liquidity. There will also be expectation that the ongoing easing policy in China may be followed suit by other Asia members," said another analyst from a local brokerage. Alliance Research maintained its "overweight" rating for the local banking sector, while RHB Research, in its report last week, upgraded the local banking sector to "neutral" from "underweight" previously.

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