DBS (D05.SG) is up 2.9% at $15.26, best performer among Singapore banks, as investors bet lender deserves to narrow valuation gap to peers with economic outlook now more positive. Stock historically laggard among Singapore banks on P/B basis.
“With Singapore’s GDP (in 1Q) jumping so strongly and DBS being the most economically-sensitive bank, it’s the most leveraged to the recovery,” a dealer at foreign brokerage told Dow Jones, “We expect to see an increase in loan demand, and since they have the lowest loan-to-deposit ratio, they probably have the most room to be aggressive.”
Still, DMG says with central bank tightening policy to allow gradual rise of SGD, Singapore interest rates expected to remain soft, saying: “On this basis, DBS, with the lowest Singapore-dollar loan/deposit ratio, will continue to suffer from low yields from interbank lending.”
With stock now at around four-month high, resistance expected at January peak of $15.80. OCBC (O39.SG) +0.8% at $9.02, UOB (U11.SG) +1.3% at $20.20. STI +1.1% at 3,003.70 at midday.
