Public Bank (Hold)

Consistency

'''' 3QFY11 results in line with HLIB and consensus.

'''' Loan growth of 13.8% yoy slightly at lower end of Public's target of 14-15% but ahead of our assumption of 12%.''

'''' Deposits growth was slightly behind at 11%.

'''' Sequentially, 3QFY11 earnings boosted by higher recovery.

'''' 9MFY11 earnings growth driven by all line items.''''

'''' Overseas operations impacted by forex but still growing.''

'''' Asset quality continued to improve.

'''' Maintain Hold and target price of RM12.88 based on Gordon Growth with ROE of 23.9% and WACC of 10%.

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KLCI: Wild swings ahead

'''' With the overnight plunge on Dow and negative remark by German's Finance Minister that there will not be a prompt solution to the euro-zone debt crisis, global markets are again susceptible to swift declines.

'''' Hence, we continue to advocate risk-averse investors to sell into strength or trim positions on Weekly resistances overbought Stochastic indicator and looming election risk. ''are 1470 (15-w SMA) and 1489 (38.2% FR) while supports are 1440 (uptrend line), 1422 (61.8% FR) and 1412 (10-d SMA).

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Dow: Due for more pullback''

'''' With the overnight plunge on Dow and more key corporate earnings to be released this week, Wall St will be bracing for more volatility ahead. Major resistance levels are 11600-11800 while crucial supports are 10800-11000 pts.