- Downward trend for foreign shareholding of banking stocks recently. Based on the latest available data, the banks have generally experienced a downward trend in terms of foreign shareholdings in recent months.

- CIMB’s foreign shareholding is now below 30%. CIMB’s foreign shareholding had decreased further to 29.4% in June 2015, from 30.0% in May 2015. This signals a new multi-year low (see chart in following page).

- Maybank’s foreign shareholding remained stable. Maybank’s foreign shareholding remained relatively stable at 21.16% as at 10 July 2015, compared to 21.0% as at end-May 2015. Thus, foreign shareholding had remained relatively stable within the 21% to 22% range over the past one year.

- Public Bank’s foreign shareholding came off slightly in June 2015. Public Bank (PBB)’s foreign shareholding came off slightly to 31.51% in June 2015, following an increase to 32.0% in March 2015, from 30.99% as at end-December 2014.

- Mid-cap stock HLBB’s foreign shareholding reversed in June 2015 quarter. Hong Leong Bank’s (HLBB) foreign shareholding reversed its recent upward trend to close at 8.75% in June 2015, from 9.11% in March 2015 and a recent peak of 9.5% in December 2014. December 2014’s foreign shareholding was at the highest level in the past seven years. Historically, HLBB’s foreign shareholding usually ranged between 7% and 8%.

- Similar trend in the other mid-cap RHB Cap’s foreign shareholding. RHB Cap also registered a recent drop in foreign shareholding, to 8.62% in end-June 2015, from 8.93% in end-May 2015, and a recent peak about nine months ago of 9.81% in November 2014.

- AFG’s foreign shareholding declined further to below 30%. AFG’s foreign shareholding continued to decline to 29.3% in June 2015, from 30.2% in May 2015.

- We maintain NEUTRAL on the sector. We remain NEUTRAL on the sector as we expect impaired loans and loan loss provisioning to be key ongoing concerns for the banking sector.

Source: AmeSecurities Research - 30 Jul 2015