-  Higher foreign shareholding for most banking stocks. Based on the latest available data, most of the banks recorded higher foreign shareholdings during the recent months (see charts in following pages).

-  Maybank’s foreign shareholding has been rising steadily since the recent low in March 2014. Maybank’s foreign shareholding continued to increase to 23.1% in the first week of September 2014, from 21.88% three months ago in early May 2014, and the recent low of 21.11% on 14 March 2014.

-  PBB recorded a jump in foreign shareholding. PBB’s foreign shareholding was much higher at an estimated 33% in June 2014, compared to an estimated 29% in May 2014. This is post the merger of its foreign and local shares, which was completed in mid-April 2014, and the initial announcement of its rights issue in end-April 2014.

-  RHB Cap also attracted higher foreign shareholding. RHB Cap’s foreign shareholding was also uplifted to 9.42% in end-August 2014. This compares to the 8.79% level in end-June, just prior to the announcement of the proposed mega-bank merger in July 2014. The recent low was 8.10% in February 2014.

-  HLBB’s foreign shareholding rose in June 2014. Hong Leong Bank’s (HLBB) foreign shareholding rose as well to 8.54% in June 2014, after slipping for three consecutive quarters to 7.99% in March 2014.

-  AFG’s foreign shareholding registered an upturn as well in the recent months. AFG’s foreign shareholding has now increased to 33.0% in end-July 2014, from the recent low of 31.3% in April 2014.

-  CIMB’s foreign shareholding slipped marginally on a MoM basis in July 14. Elsewhere, CIMB’s foreign shareholding slid marginally to 34.5% in July 2014, from 34.6% in June 2014.

-  We remain NEUTRAL on the sector. Foreign shareholding of banks continued to rise in recent months, based on the latest data. Our top picks are HLBB and CIMB.

Source: AmeSecurities