Bank Stock Market Dynamics Report

Date: September 27, 2024

Recently, Malaysian bank stocks have broadly declined, with the exception of Hong Leong Bank (HLB), while other major bank stocks have experienced varying degrees of drop. This report will explore the reasons for the downturn and the strengths of HLB.

Reasons for Market Decline
1. Continuous Net Selling by Foreign Investors:
According to recent data, foreign investors have net sold for five consecutive days, leading to a broad decline in bank stocks and energy stocks favored by foreign funds.
The withdrawal of foreign funds typically makes market sentiment cautious, exerting noticeable pressure on stock prices.

2. Rapid Appreciation of the Malaysian Ringgit:
Over the past six months, the Malaysian Ringgit has appreciated by 14.81%. For foreign investors, the rapid appreciation of the currency reduces their investment returns, prompting some to exit.

3. Performance of the A-Share Market:
Recently, the Chinese A-share market has seen significant gains, attracting investor attention and causing capital to flow out of the Malaysian market in search of more appealing investment opportunities.

2. Robust Financial Performance:
HLB exhibits strong performance in asset quality, profitability, and capital adequacy, bolstering investor confidence and allowing it to stand firm in the market.

3. Diversified Business Operations:
HLB's business extends beyond traditional banking services, involving wealth management and investment banking, thereby enhancing its profitability and market competitiveness.