The trio led gains on the benchmark Straits Times Index on Tuesday, with OCBC closing 3.3% higher at S$26.34 (US$20.39), UOB advancing 2.9% to S$41.69 and DBS climbing 2.6% to S$68.64.
The gains followed a research note from Citi that named DBS its preferred local bank pick with a “buy” rating, citing strong dividend per share visibility and the lender’s position as a premier Asia wealth proxy, according to The Business Times.
OCBC also received a “buy” rating, with Citi expecting the lender to continue growing and narrow its return on equity gap with DBS.
UOB retained a “neutral” rating, with Citi noting that the bank’s wealth and loan-growth trajectories currently lag those of its peers while its earnings projections remain strictly in line with market expectations.
The Straits Times Index closed Tuesday at 5,342.240, up 1.57%.
Automated Teller Machines (ATMs) from Citibank, OCBC, UOB and DBS line the wall in Changi Airport Terminal 2, Nov. 28, 2011. Photo by SPH Media via AFP |
On Wednesday, UOB climbed to a fifth straight record intraday high and was last up 4.65% at S$43.63 by midday after touching S$43.79 earlier in the session. DBS gained 1.5% to S$69.67, while OCBC was up 2.9% to S$27.10.
Dow Jones Newswires reported on Wednesday that Macquarie Capital has upgraded DBS and UOB to “outperform” from “neutral.” The target price for DBS was lifted from S$52.38 to S$70.86 while that of UOB rose from S$36.78 to S$45.16.
The investment bank also kept its “outperform” rating on OCBC and raised its target price from S$24.25 to S$27.76.
Jayden Vantarakis, head of Asean equity research at Macquarie Capital, said in a note that there is still potential for further re-rating, underpinned by an improved sector outlook in which net interest income and non-interest income can grow in tandem, while the Singapore dollar stays a preferred currency amid broad U.S. dollar strength.
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