AMMB Holdings Berhad (1015:KL) Q1 net profit rises 12.6pc to RM391.46m

AMMB Holdings Berhad (1015:KL) Q1 net profit rises 12.6pc to RM391.46m

AMMB Holdings Berhad (1015:KL) Q1 net profit rises 12.6pc to RM391.46m

AMMB Holdings Bhd (AmBank Group) posted a 12.6 per cent rise in net profit to RM391.46 million in the first quarter ended June 30, 2019 (Q1) from RM347.59 million in the same period a year ago.

Revenue was 10.1 per cent higher at RM2.39 billion compared with RM2.17 billion previously.

Group chief executive officer Datuk Sulaiman Mohd Tahir said the bank’s total income rose 5 per cent to RM1.06 billion, underpinned by consistent net interest income (NII) growth of 4.2 per cent and higher trading and insurance income.

“Return on equity was 8.8 per cent higher in the quarter reviewed compared with 8.3 per cent in Q1 in the 2019 financial year (FY19).

“At the same time, we continued to exert cost discipline with our cost-to-income (CTI) further improving to 49.7 per cent (Q1 FY19: 50.6 per cent). This is a testament to our transformation strategy, which has placed the group on a stronger footing to weather the more challenging operating landscape,” he said in a statement.

Sulaiman said the group is now in the third year of its Business Efficiency Target 300 (BET300) programme and continued to record cost savings, which has allowed it to re-invest some of these savings back into its strategic business streams, digital capabilities and infrastructure.

In addition, operating expenses were well contained, up 3.1 per cent year-on-year (y-o-y) to RM528.6 million.     

He said gross loans increased 2.5 per cent y-o-y, but declined one per cent year-to-date to RM100.8 billion, mainly due to corporate loan repayments and decline in auto loans.

Mortgage loans increased 1.7 per cent year-to-date to RM34.7 billion, while loans in the retail small and medium-sized enterprises and business banking segments grew 6.0 per cent and 1.1 per cent year-to-date, respectively.

Total customer deposits increased 4.32 per cent y-o-y to RM102.8 billion, but was down 3.9 per cent year-to-date.    

Sulaiman said AmBank Group remained focused on further strengthening cost efficiencies through its BET300 programme, which involves every line of business.

“The group’s financial year 2020 strategic priorities are in place. As part of our digital road map, we will be rolling out more digital initiatives that provide us with a competitive edge and at the same time benefit customers,” he added.

He said Malaysia’s outlook remained stable, with the economy expanding 4.9 per cent y-o-y during the second quarter of 2019, supported by sustained domestic demand.

The country’s gross domestic product is projected to grow at about 4.5 cent in 2019, underpinned by domestic demand, with private consumption taking the lead, while inflation is anticipated to be around one per cent.

“While the overnight policy rate is expected to remain unchanged at 3.0 per cent for the rest of the year, there is still room for Bank Negara Malaysia to reduce the rate by 25 basis points in the second half of 2019, in a move to support domestic demand and in tandem with global monetary policy, where rates are expected to drop further.

“In tandem with a moderate economic outlook, the banking system loans growth is envisaged to grow at around 4.6 per cent,” he added.

Technical Indicators

Overall, the bias in prices is: Downwards.

By the way, prices are vulnerable to a correction towards 4.20.

The projected upper bound is: 4.29.

The projected lower bound is: 3.97.

The projected closing price is: 4.13.

Candlesticks

A big white candle occurred. This is generally considered bullish, as prices closed significantly higher than they opened. If the candle appears when prices are “low,” it may be the first sign of a bottom. If it occurs when prices are rebounding off of a support area (e.g., a moving average, trendline, or retracement level), the long white candle adds credibility to the support. Similarly, if the candle appears during a breakout above a resistance area, the long white candle adds credibility to the breakout.
During the past 10 bars, there have been 3 white candles and 6 black candles for a net of 3 black candles. During the past 50 bars, there have been 17 white candles and 26 black candles for a net of 9 black candles.

Momentum Indicators

Momentum is a general term used to describe the speed at which prices move over a given time period. Generally, changes in momentum tend to lead to changes in prices. This expert shows the current values of four popular momentum indicators.

Stochastic Oscillator

One method of interpreting the Stochastic Oscillator is looking for overbought areas (above 80) and oversold areas (below 20). The Stochastic Oscillator is 49.1525. This is not an overbought or oversold reading. The last signal was a buy 0 period(s) ago.

Relative Strength Index (RSI)

The RSI shows overbought (above 70) and oversold (below 30) areas. The current value of the RSI is 52.73. This is not a topping or bottoming area. However, the RSI just crossed above 30 from a bottoming formation. This is a bullish sign. A buy or sell signal is generated when the RSI moves out of an overbought/oversold area. The last signal was a buy 0 period(s) ago.

Commodity Channel Index (CCI)

The CCI shows overbought (above 100) and oversold (below -100) areas. The current value of the CCI is 65. This is not a topping or bottoming area. The last signal was a buy 2 period(s) ago.

MACD

The Moving Average Convergence/Divergence indicator (MACD) gives signals when it crosses its 9 period signal line. The last signal was a buy 0 period(s) ago.

Rex Takasugi – TD Profile

AMMB HLDGS BHD closed up 0.240 at 4.140. Volume was 154% above average (trending) and Bollinger Bands were 116% wider than normal.

Open     High      Low     Close     Volume___
3.900 4.250 3.880 4.140 6,346,900
Technical Outlook 
Short Term: Neutral
Intermediate Term: Bearish
Long Term: Bearish
Moving Averages: 10-period     50-period     200-period
Close: 3.99 4.24 4.34
Volatility: 42 25 24
Volume: 2,199,010 2,335,660 2,812,250

Short-term traders should pay closer attention to buy/sell arrows while intermediate/long-term traders should place greater emphasis on the Bullish or Bearish trend reflected in the lower ribbon.

Summary

AMMB HLDGS BHD is currently 4.6% below its 200-period moving average and is in an downward trend. Volatility is extremely high when compared to the average volatility over the last 10 periods. There is a good possibility that volatility will decrease and prices will stabilize in the near term. Our volume indicators reflect volume flowing into and out of AMMB.KL at a relatively equal pace (neutral). Our trend forecasting oscillators are currently bearish on AMMB.KL and have had this outlook for the last 28 periods.

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