Malaysian Bank Earnings Likely to Remain Resilient — Market Talk

Malaysian banks are expected to maintain strong earnings visibility and defensive dividend yields despite uncertainties created by the Middle East conflict, Hong Leong IB analyst Raymond Ng says in a note. While higher energy prices could pressure retail and small and medium-sized enterprise borrowers, sizeable pre-emptive provisions and strong collateral backing should provide adequate asset-quality buffers, he says. Bank Negara Malaysia's recent 5 billion ringgit financing support facility is also expected to help contain credit risks and prevent a sharp rise in impaired loans, he adds. Ng favors a selective stock-picking strategy, with CIMB and AMMB among his preferred picks given their attractive valuations and dividend visibility. (yingxian.wong@wsj.com)