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DBB, OCCB and UBB: Are Singapore Banking Parts Ready to Crash?



Singapore's current economic data indicates a sharp rise in traders. As a result, the government has increased Singapore's full-year growth rate between 0-1%, ranging from 1.5% to 2.5% of the former's revenue.

At the recent National Current Relief, Prime Minister Lee House Luong acknowledged that Singapore's economy is a hit and that the government is ready to implement economic measures.

For Singapore banks, such as Dbc Holdings Ltd (SMX: ڊ 05) Overia-Chinese Banking Corporation Limited (SGX: A339), or OCTC, and Joint Overseas Bank Limited (SMEX: U11), or UOS, investors may be surprised to see their fields grow and start to stagger. Are banks fully sailing in the tropics that drive up their share prices?

In a macroeconomic development

Many businesses are baking themselves for economic slowdown, with news reporting that different sectors such as retail, electronics and services are already seeing signs of lower orders and demand.

It has been described as slow to differentiate from the previous global financial crisis (GFC) as the entire supply chain continues its trade war, adding to its value as the United States and China.

As businesses experience lower back pain and increased order positioning, many will also cut down on expansion plans and raise eggs to prepare for the storm. This will affect banks' lending and increase their ability to expand their loan book.

Interest rate limit

In line with global growth, the US Federal Reserve has already launched its interest rate before the GFC, reducing its rate by 25 points (e 0.25%). While Singapore is likely to have an impact on the fallout of this rate, economic experts have pointed out that as the US numbers continue to deteriorate, further cuts may be off the horizon.

Banks find it easier to raise higher prices, thus allowing them to raise their prices more often than they should. If prices start to head south, local banks may not be able to increase their net interest.

The destruction of the digital bank

In addition to the above information, the Property Authority of Singapore (MS) has also announced that they will soon allow two license banks, two full licenses and three licenses simultaneously.

Opening of non-banking companies to invest with non-competitors can raise a bargain on local bank sector interest rates and increase the value of their deposits (ie, interest rates on their savings and expenses on existing accounts). Will).

The values ​​continue

From the above, it is evident that banks will come in a spectacular storm, in which the debt will increase, their net interest will play markers and more competition in the sector.

DBS is still sold at a book value of 1.4x, with UBS at 1.2x book value, while OCCB is priced at only 1.1x book value (1.1x). Investors may want to wait for investment rates, in light of uncertainties and lower demand prices before making a challenge.

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The information provided is for general information purposes only and is not intended to be a personal investment or financial advice. MohaliFall Singapore Singapore Recommended shares of DBS Holdings Ltd, Overseas-Chinese Banking Corporation Limited and Union Overseas Bank Limited. McLaughlin does not own any of the companies of Rochester Wang, which helps companies in Singapore.


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