RHB

Market Outlook
Tracking Global News
1. US New Home Sales Plunge in December
2. US Leading Index Rose Marginally At End-2017
3. Japan’s Consumer Inflation Steady In December, Pose Challenge for BOJ
4. ECB Chief Took A Swipe At Washington For Talking Down The USD
5. Malaysia’s Central Bank Raises Rates Amid Strong Economic Activity

More

Malaysia Sector Update - Earlier Thank Expected OPR Hike
Bank Negara Malaysia raised the OPR by 25bps to 3.25% during yesterday’s policy meeting. Our sensitivity analysis points to a 4bps improvement in sector average NIM, and a 2.5% uplift in sector net profit. Although the enhancements are modest, they are positive and contribute towards the gradual uptrend in sector earnings and ROEs. We reiterate our OVERWEIGHT sector stance with BUYs on CIMB, Maybank and BIMB.

More

G3 & The Global Economy
Growth To Be Sustained As Recovery Broadens

After going through a consolidation in 2016, the global economy has emerged
stronger. This is on the back of monetary policies easing in the Eurozone,
Japan and China, while monetary conditions remain loose in the US despite the
tightening. We believe the global growth is likely to be sustained and remain
relatively strong moving into 2018. This is as the recovery in global economic
growth is becoming more broad-based, along with rising confidence, improving
employment, and income that can withstand the gradual global monetary
policy-tightening processes.

More

Regional Market Outlook
Quarter 3, 2017

More

Global Economic Update
Tracking Global News
1. US Housing Starts Rebounds Sharply in June
2. Eurozone Construction Output Falls In May
3. Beijing Home Prices Decline MoM For First Time Since 2015
4. Malaysia’s Inflation Slows Further Amid Lower Fuel Prices

More

Market Strategy for Malaysia Economic
The ongoing crackdown on illegal foreign workers in Malaysia is a worry for its negative impact on economic growth and corporate earnings while adding another negative factor to further dull investor sentiment. However, the ensuing labour shortages comes at an inconvenient time for the economy and financial markets given the nascent uptick in GDP growth and expected rebound in corporate profitability. The fragility of earnings arising from cost pressures has been a recurring theme in recent years and the clampdown would heighten the risks to growth, requiring close monitoring. However, past experience has shown that the initiatives to weed out illegals only last for a few months. The current crackdown is also likely to be offset by stronger export growth. We make no change to our +4.8% GDP growth forecast for the time being.

More

Major highlights for 2017 Malaysia Budget
In an effort to assist business entities to be more competitive in the market, the Government has proposed a reduction of corporate tax rate for SMEs from 19% to 18% on the chargeable income up to RM500,000 for YA 2017. In addition, the Government has also proposed a reduction of corporate tax rate based on the annual increase in chargeable income for YAs 2017 and 2018 as follows:

More

December 2016 Updates
Tracking Global News
1. US Personal Consumption Slows in November, As Income Barely Changed; GDP Revised Higher
for 3Q 2016, Durable Goods Fell and Leading Indicator Stalls in November
2. Japan Approved a Record Budget For 2017
3. Philippines Left Its Key Rates Unchanged in December

More