Important sign(s) for the market, not just property.

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How’s the electronics manufacturing industry doing? It’s not just waiting for official statistics. I could check with a few engineer friends from different companies. If all of them say they are working hard and expects a good increment, then I know the situation’s okay. I even bought a company’s stock when I learnt that most of its engineers were working late for the past few months. Yes, it gave me good returns a few months after that. How’s the property market doing? Actually, we could ask real estate friends we have and it will give us an idea. What will provide an overall picture would be the banks. Most home buyers will need to get a bank loan when they buy their properties. Therefore if the banks are having a tough time (Non Performing Loans are up, loans growth is subdued) then their results would reflect the market condition.

These are predictions by analysts about the banking sector for 2019. Article in here. The general conclusion by analysts is that the banking sector will be able to maintain its earnings potential this year as margin pressure is expected to ease and continued loans growth with stable asset quality. MIDF Research said while the industry’s loans growth moderated to 5.6% year-on-year (y-o-y) as at December 2018 due to moderation in business loans and loans for the purchase of residential properties, the growth was still slightly above its expectations. “As for CY19, we expect a moderation in loans growth to 4.7% y-o-y due to the high base effect. We also believe that deposits growth will moderate to 5.3% y-o-y due to lower growth in fixed deposits growth this year.” Its top picks for the sector includes Maybank, CIMB and Public Bank.

AmBank Research said it expects that the foreign fund inflows into emerging markets would benefit the share prices of the liquid banking stocks as the US Fed rate hike is tapering off. It maintained its “overweight” stance for the sector with “buy” calls on RHB Bank, Public Bank, Alliance Bank, BIMB Holdings, Maybank as well as MBSB. Its tops picks include Maybank, Public and RHB Bank. The reason it likes Maybank includes dividend yield for the stock continues to be attractive relative to peers with its high payout ratio while potentially offering investors higher returns with the reinvestment of their dividends into additional shares under the DRS (dividend reinvestment scheme). Full article in here.

Banks are doing fine for 2019, results wise. Property market should not be worse than 2018 perhaps? Let’s keep following the development from the banks because this reflects the economy too.

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