The latest Market Talks covering Financial Services. Exclusively on Dow Jones Newswires at 4:20 ET, 12:20 ET and 16:50 ET.
0814 GMT - Saksiam Leasing's earnings are likely to grow 13%-14% annually from 2024 through 2026, driven by 12%-14% loan growth and lower cost of funds, Maybank Securities (Thailand) analyst Jesada Techahusdin says in a note. The personal-loan provider's focus on risk management and cost control is also expected to improve its profitability, the analyst adds. The brokerage initiates coverage of the stock with a buy rating and a target price of THB6.50. Potential rerating catalysts include a rising return-on-equity outlook, manageable asset quality, good cost control and the company being a prime beneficiary of rate cuts, Techahusdin says. Shares were last at THB4.92. (amanda.lee@wsj.com)
0510 GMT - Macquarie's investment case continues to hinge around asset realizations, capital deployment and performance fees in its asset management unit, says UBS analyst John Storey in a note. Also of importance is the sustainability of profits within its commodities and global markets business, as well as improvements in capital market activity in Macquarie Capital, he adds. Visible Alpha net profit consensus numbers for FY 2025 look achievable in the context of the 2H FY 2024 result. UBS stays neutral-rated on Macquarie, but raises its target price by 8.1% to A$200.00. Macquarie last up 1.1% at A$185.91. (alice.uribe@wsj.com)
0442 GMT - Westpac's multi-brand strategy makes sense, with customers still choosing brands, says the Australian lender's CEO Peter King. Still, speaking to analysts and media after the Australian lender issued its 1H FY 2024 results, King says Westpac is being "more thoughtful" about how it uses its brands. For example, he says the private wealth business is moving to the Westpac brand and BankSA is another attractive brand. "Certainly reusing technology over time will provide efficiency," King says. "So, we use brands where it makes sense and we're thoughtful about how we can reuse the assets of the bank to service all the brands." (alice.uribe@wsj.com)
0439 GMT - Australia's interest rates may stay higher for longer, but a rate rise is probably not on the cards, Westpac CEO Peter King tells analysts and media after the Australian lender issued its 1H FY 2024 results. With the economy going well at the moment, a rate cut may come in 2025, King says. "Certainly our economics team is forecasting a cut in the fourth quarter, my personal view is I think that's a bit too early," King says. He reckons that there still needs to be a further slowdown in employment numbers with certainty in demand for infrastructure, housing and energy transition remaining. Still, he says he's "not in the camp of more interest rates." (alice.uribe@wsj.com)
0406 GMT - Malaysia's equity market seems to be on track for continued growth, Citi head of Malaysia research Megat Fais says in a note. Drivers include a resilient global economy, peaking interest rates, the semiconductor industry recovery, and political stability at home, he says. Given the KLCI's year-to-date strong performance, focus will be on corporate earnings, which Fais projects will grow 12.4% in 2024. Citi raises its end-2024 KLCI target to 1660 from 1594, pegging CIMB, Sime Darby Plantation, Genting Malaysia, Inari Amertron, Mr. D.I.Y. and Frontken as its top picks. The KLCI is last up 0.3% at 1594.33, bringing year-to-date gains to 9.6%. (yingxian.wong@wsj.com)
0215 GMT - Westpac's credit profile is likely to remain robust even as it increases its share buyback by A$1.0 billion and announces a special dividend, says S&P Global Ratings in a note. As of end-March, Westpac's common equity Tier 1 ratio stood at 12.55%, notes S&P, adding that the lender will manage its CET1 ratio above 11%, which is above the Australian Prudential Regulation Authority's regulatory capital requirement of 10.25%. Westpac's capital return is "consistent with many domestic peers, who are also reducing the considerable capital buffers they have held above their targeted and regulatory requirements," says S&P. (alice.uribe@wsj.com)
0147 GMT - Westpac's 1H FY 2024 results are largely in line with consensus views, with the capital returns element "encouraging," says UBS analyst John Storey in a note. The performance of Westpac's business and wealth unit supported the results, while overall cost growth met consensus expectations. "Against this we note a worse-than-expected deterioration in asset quality, and lower overall provision coverage," says UBS, adding that return on equity is still low. The results suggest cost inflation is moderating, but UBS thinks investment and software amortization expenses will remain high, and expects to see some deterioration in credit quality. (alice.uribe@wsj.com)
0056 GMT - Macquarie is likely to deliver 22% net profit growth in FY 2025, say Morgan Stanley analysts in a note. This is despite guidance for slower-than-expected Macquarie Capital FY 2025 investment gains recovery and weaker margin trends for Macquarie's banking unit, says the investment bank. MS cuts its FY 2025 earnings per share by 7.5% on weaker margins in the banking unit, and slower investment gains recovery in Macquarie Capital, but reckons Macquarie is likely to benefit from capital markets recovery. (alice.uribe@wsj.com)
0030 GMT - Westpac's 1H FY 2024 result makes the consensus on net interest margin in future fiscal years look quite pessimistic, says E&P analyst Azib Khan in a note. E&P says core NIM (ex markets and treasury and notables) in 1H is pleasing, with NIM remaining flat at 180 basis points from 1Q FY 2024 to 2Q FY 2024. "As we had expected, Westpac is now showing improved margin/volume discipline, with mortgage growth over the half at one times system," E&P says. It expects consensus statutory net profit after tax upgrades of 2% for FY 2024 and FY 2025 on higher expected NIM. Still, E&P notes asset quality is deteriorating. (alice.uribe@wsj.com)
0007 GMT - A sluggish recovery in green investments may stymie Macquarie's asset management unit, say Citi analysts Brendan Sproules and Thomas Strong in a note. They reckon the company's commentary on Macquarie Asset Management implies a revenue of around A$4.0 billion in FY 2025, which is significantly below the consensus forecast of around A$5.0 billion, and Citi's forecast of around A$4.7 billion. "We think this relates to a more muted recovery in green investments, where we expect the market to increasingly focus on the returns," it says. Citi sees Macquarie's FY 2024 headline results was in line with consensus, but calls out that MAM's contribution was below consensus. (alice.uribe@wsj.com)
0001 GMT - Westpac's 1H FY 2024 result was relatively in-line, say Citi analysts in a note, believing the market should receive it well. Capital was a highlight of the result, with a slightly better dividend, a special dividend and an increase to its buyback. Still, a risk for the lender is how well its management communicates the future path on costs, given there have been disappointments in this area in recent years, say Citi. "While costs were in-line with the street, we note that investment spend of A$736 million is materially below management's guidance of A$1.8 billion for the year, suggesting a good pickup in spend in 2H FY 2024," says Citi. (alice.uribe@wsj.com)
2349 GMT - Westpac's 1H FY 2024 looks solid and is hard to fault, according to Jarden analysts Carlos Cacho and Jeff Cai. In a note, they say the lender achieved beats across most of its business lines. "The stabilization of core net interest margin over the last six months is a clear positive and suggests that the margin drag is now largely behind it," says Jarden. While Westpac provided limited guidance, continued moderation in competition--Westpac called out lessening mortgage competition--should be positive for the lender, Jarden reckons. The investment bank says it will be looking for more information on collective provision releases and any color on the Unite transformation plan. (alice.uribe@wsj.com)
(END) Dow Jones Newswires
May 06, 2024 04:20 ET (08:20 GMT)
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