• Sectoral Review

    • sectoral review
    • sectoral review
      • February-2021: Surviving Amid Shocks
        We view the outlook for the multi-finance industry to remain stable over the short and medium term, despite the persistent pressure in asset quality and profitability. We expect the industry growth outlook to remain weak but will improve in 2021 compared to 2020. Competition has also remained intense amid the weak market growth, resulting in the disadvantaged position of independent finance companies relative to their bank-related or principal-related peers. Indeed, its growth prospect in 2021 will also not be spared from the speed of the economic recovery, dependent on factors, such as the rise of household incomes, unemployment level, consumer expectations of future financial conditions and jobs, credit policies, and availability of funding. We view that asset quality will take time to improve given the uncertainty of economic recovery, while the multi-finance companies’ profitability will continue to come across pressure in 2021 in line with the high provisioning expenses and weak growth forecast. More detail ...
      • December-2020: Property Industry Prospects is Weak in The Rental Segments but Relatively Tough in Th
        We are of the view that the prospects of the property industry are mixed in the short term. We expect sluggish demand for the rental property market, while for the selling segment, especially landed houses, demand to remain quite strong. The property market has been operating on its fundamentals following the end of the commodity boom in 2014. Starting from early 2020, however, the Covid-19 pandemic brought about a contraction of economic activity, hence economic growth, resulting in the subdued demand for rental properties and to a lesser extent properties for sale. More detail ...
      • October-2020: Banking Industry
        We view the outlook for the banking industry to remain stable in the medium term, although the growth prospects and profitability may show a weakening trend in the short term period. The increasing economic risk due to the COVID-19 pandemic weakens loan growth, which may cause contraction until the end of the year. With weaker loan growth, the strongest pressure was felt in the profitability indicators; banks are suffering lower interest revenue - but having learned from past crises – keeping abundant liquidity to ensure survival during this difficult time. Furthermore, the pressure also comes from incurring higher provision costs due to asset quality deterioration and loan restructuring, as they have to absorb the cost of debtors struggling in making timely payments. More detail ...
      • August-2020: Construction Industry
        We view the outlook for construction industry will be challenging as growth prospects are weaker than we anticipated. The coronavirus (COVID-19) pandemic has resulted in reduced construction activities following the large-scale social restrictions (PSBB) imposed by the government to curb the outbreak, consequently delaying project deliveries. Demand is also expected to be weaker in the short term on the back of delays and postponement of several infrastructure projects and the economic fallout caused by COVID-19. More detail ...
      • June-2020: Non-Life Insurance Industry
        We are of the view that the outlook for the non-life insurance industry is negative in the short term, given the COVID-19 pandemic impact that disrupted economic activities and significantly lowered demand for the non-life insurance industry, increasing the overall risk profile. Growth has significantly dropped to 0.4% in 2020 in comparison to 14.1% in FY19, and in our opinion, there is still a risk of further decline if the recovery process of economic activities are longer than initially projected. More detail ...
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