MBSB IB Maintains Positive Call On Insurance Sector Despite Healthcare Inflation
MBSB IB Maintains Positive Call On Insurance Sector Despite Healthcare Inflation
KUALA LUMPUR, Aug 15 (Bernama) -- MBSB Investment Bank (MBSB IB) has maintained its 'positive' recommendation on the insurance sector, citing attractive valuations and high dividend yields despite persistent healthcare inflation and delays in healthcare cost-control reforms.
In a research note today, the bank said healthcare inflation remains a 'tricky issue to fix' as higher spending on the sector appears inevitable.
'Our primary concern is that if healthcare inflation is still rampant, what will happen at the end of Bank Negara Malaysia's three-year cap on medical insurance premium hikes?
'But there are multiple tailwinds -- a cheap price point, attractive dividend yields, a potential windfall in investment income, and encouraging progress by insurers in addressing the healthcare inflation problem -- making the sector due for a positive re-rating,' it said.
The bank noted that companies under its coverage are market leaders, enabling them to withstand challenges better than most.
MBSB IB said medical cost pressures are being fuelled by private hospitals rejecting proposed cost freezes, opposing pharmaceutical price controls, and what insurers describe as 'buffet table syndrome', where high claims are linked to increased service use without clear medical need.
It also pointed to Malaysia's relatively low preventive healthcare spending and intensifying competition in healthcare tourism from Thailand, Indonesia and Singapore.
However, the bank highlighted some progress in tackling medical inflation, including the Price Control and Anti-Profiteering (Price Marking for Drug) Order 2025, which will require mandatory medicine price displays in the private sector by 2026.
'The initiative aims to enable the public to make informed choices by knowing the prices in advance and to encourage competitive medical pricing, although it has faced resistance, with several medical groups filing a judicial review," it said.
The bank added that another factor is the decline in active pharmaceutical ingredient (API) raw material prices to pre-pandemic levels, after surging during the pandemic and staying elevated for several years due to logistical constraints, factory closures and increased demand for healthcare products.
MBSB IB's top picks are Allianz Malaysia Bhd, with a target price of RM21.59, and Syarikat Takaful Malaysia Keluarga Bhd, with a target price of RM4.59, while LPI Capital Bhd is also rated 'buy'.
-- BERNAMA
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
The Sun
13 minutes ago
- The Sun
Raja Muda of Perlis urges digital literacy via NADI hubs
PADANG BESAR: The Raja Muda of Perlis, Tuanku Syed Faizuddin Putra Jamalullail, encouraged residents to maximise the benefits of National Information Dissemination Centres (NADI) for personal and community growth. He highlighted the role of 17 NADI centres across Perlis as vital hubs for training, information access, and guidance. 'Let us together take advantage of this opportunity to build a more digitally literate, competitive and progressive society,' he said during the Perlis Connect programme launch. The event was attended by Perlis State Legislative Assembly Speaker Rus'sele Eizan and Communications Ministry Secretary-General Datuk Seri Mohamad Fauzi Md Isa. Also present were MCMC member Gen (Rtd) Tan Sri Zulkifeli Mohd Zin and Bernama CEO Datin Paduka Nur-ul Afida Kamaludin. Tuanku Syed Faizuddin emphasised that Perlis Connect aims to ensure digital inclusion for all, regardless of background or location. 'The firm commitment shown by the Ministry of Communications, the MCMC, Bernama, telecommunications companies and strategic partners is truly commendable,' he added. He noted that digital advancements are bridging gaps between urban and rural areas, creating jobs and improving livelihoods. The initiative symbolises successful collaboration to ensure widespread digital benefits, he said. 'This integrated effort should be continued and expanded to ensure a continuous impact on the people,' he stressed. The programme includes public engagement sessions, cybersecurity awareness, and e-learning opportunities. Tuanku Syed Faizuddin highlighted that digital transformation goes beyond infrastructure, requiring trust and ethical practices. 'I envision a younger generation that is tech-savvy, confident senior citizens and youth with leadership spirit and responsibility,' he said. Perlis Connect, a joint effort by MCMC and Bernama, educates the public on safe internet usage and roaming awareness. It also promotes NADI facilities and supports local entrepreneurs in marketing their products. The event featured pocket talks on anti-bullying, reinforcing government efforts to curb bullying among students. - Bernama
Barnama
27 minutes ago
- Barnama
Timor-Leste's Accession As A Permanent ASEAN Member Draws Closer
SEREMBAN, Aug 16 (Bernama) -- Timor-Leste's permanent membership in ASEAN is now at the documentation stage, ahead of its official admission as a full member during the ASEAN Summit scheduled for October. 'At the upcoming ASEAN Summit in October, there will be a ceremony to welcome Timor-Leste as a permanent member of ASEAN. Right now, it is only at the documentation stage,' Foreign Minister Datuk Seri Mohamad Hasan told reporters today. 'Most of ASEAN's requirements have already been fulfilled by Timor-Leste. We decided that they should first be admitted as a permanent member, after which ASEAN will assist them in completing the remaining documentation process,' he said after officiating the women, youth, and puteri UMNO Rembau division meetings here today. bootstrap slideshow ASEAN reaffirmed its commitment to admitting Timor-Leste as the 11th member at the 47th ASEAN Summit in October, in line with the decision made at the 46th Summit. In the Joint Communique issued following the 58th ASEAN Foreign Ministers' Meeting on July 9, ministers expressed their commitment to supporting Timor-Leste in expediting its early accession to key ASEAN economic agreements to facilitate its full integration into the regional bloc. 'We look forward to Timor-Leste fulfilling its roles and obligations as an incoming member state and its commitment to upholding ASEAN's fundamental principles,' it read. Timor-Leste, Southeast Asia's youngest nation, applied for ASEAN membership in 2011, nine years after gaining independence on May 20, 2002. Although the process has been lengthy and challenging, Dili has demonstrated strong commitment in meeting the bloc's stringent membership criteria. In February, Malaysia announced a contribution of US$200,000 to the ASEAN Secretariat's Timor-Leste Unit in Jakarta to help expedite the membership process.
Barnama
29 minutes ago
- Barnama
Chong Wei Chosen As One Of New BAM Council Members
KUALA LUMPUR, Aug 16 (Bernama) — Malaysian badminton legend Datuk Seri Lee Chong Wei has been appointed as one of the new Badminton Association of Malaysia (BAM) council members, marking his return to the sport in line with BAM's vision of making Malaysia a global badminton powerhouse. BAM president Tengku Datuk Seri Zafrul Abdul Aziz said the appointment of Chong Wei along with three other prominent figures was approved by council members during today's meeting. The other three new council members are branding and media strategist and former CEO of NTV7 and Telekom Malaysia Datuk Seri Shazalli; a member of EPF's investment panel and board Tan Sri Gooi Hoe Soon; and partner of Cecil Abraham & Partners Datuk Sunil Abraham. bootstrap slideshow 'They have agreed. They are independent. I can appoint five but we appoint four first with the consultation with the council members. Right now he's (Chong Wei) put on the council first. 'Once we finalize the committee, logically, if we should put the council members and all the council members including the independent ones where they can contribute the most. So if you think you can contribute on performance, we should put him in performance,' he said. Tengku Zafrul said this at his first council meeting at the Akademi Badminton Malaysia today, where earlier BAM received a Perodua Aruz multipurpose vehicle. He added that the committees are expected to be finalised by October in line with the next BAM council meeting but some decisions may be implemented earlier. He also confirmed his proposal to streamline BAM's committee structure for greater efficiency. 'Yes, my proposal is we look at combining some and having new ones also. Again, I want to be more inclusive in my decision. I don't want to tell the council member, this is my view and do it. I want to sit down and think properly because the committee to me, the right step is to have the plan. Make sure we adopt the plan.
