Its shares ended nearly 0.5% higher at SGD70.79, after touching an all-time high of SGD70.80 earlier in the session, taking their gains so far this year to some 26%, according Reuters.
The rally comes before DBS reports its second-quarter results on August 6. The bank posted a 1% rise in first-quarter net profit to SGD2.93 billion, helped by record income and strong wealth management fees.
Analysts said improving earnings visibility and a more favorable interest rate outlook likely fueled the share price gains over the past week. Further upside could follow if the lenders provide positive guidance when they release their results.
“We are entering an environment where we believe Singdollar rates will be supportive of improving net interest income alongside continued strength in non-interest income,” said Jayden Vantarakis, head of Asean equity research at Macquarie Capital, as quoted by The Business Times.
The rally in the top three banks by market value – DBS, OCBC and UOB, which together make up more than 50% of the Straits Times Index’s total weighting – has also lifted the benchmark index to record highs.
Vantarakis said the strength of the U.S. dollar, driven by higher U.S. interest rates, is positive for Singapore dollar rates. He added that a backdrop of modest rate increases would support wealth inflows and asset quality.
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A man walks past a Development Bank of Singapore(DBS) logo in Mumbai, India, Sept. 28, 2022. Photo by NurPhoto via AFP |
He also expects further sector re-rating potential, supported by growth in both net interest income and non-interest income, while the Singapore dollar remains a preferred currency amid broad U.S. dollar strength.
The banks are also positioned to benefit from strong credit growth and wealth management fees, said Thilan Wickramasinghe, head of Singapore research and regional head of financials at Maybank Securities.
He added that ongoing uncertainty in some regional markets, along with conflict in the Middle East, likely helped channel safe-haven liquidity toward Singapore banks over the past week.
Sourcee.vnexpress.net
