Higher Bond Yields in Malaysia May Pressure Banking Capital
Dow Jones
Oct 06
0210 GMT - A 100bp rise in Malaysian government bond yields could reduce the banking sector's capital buffers by about 46bp, even after mitigating factors, RHB IB analysts David Chong and Tan Yenn Lynn say in a note. Bank Islam Malaysia, Alliance Bank Malaysia and Malayan Banking are expected to be more sensitive, while AMMB and Public Bank are better insulated, they reckon. Changes to bank capital rules should cushion much of the impact for some banks, while dividend reinvestment plans could help preserve capital, they say. RHB maintains a neutral rating on Malaysian banks, pegging AMMB, Malayan Banking and Hong Leong Bank as top picks.
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