DBS share price suffered from explosive meltdown

After leading DBS to achieve a record net profit of $1.52 billion for first-quarter 2018, CEO Piyush Gupta must be at a loss for words on the recent meltdown of DBS share price. From 30 April to 4 July, DBS share price plummeted from a record $31 to $26.38, a massive decline of 14.4%.

The sudden loss of form for DBS share price must have scared the living daylights out of shareholders. After all, DBS share price had been cruising along fine with its robust set of financial results. Nonetheless, the current performance of DBS share price is not reflective of underlying business fundamentals because as far as I understand, there are no business concerns for DBS at all. The culprit for the fall of DBS share price should be the work of the short-sellers.

Should shareholders run for their lives or keep faith with CEO Piyush Gupta?

Dance with the wolves

The current meltdown is one of the biggest declines in my recent memory of DBS share price. The last time that a correction of such magnitude was back in 2009, the dark days of the Great Financial Crisis and 2016, the peak of the oil slump affecting the banks. But hey, this is peace time we are talking about, aren’t we?

The recent sharp decline had unexpectedly pulled the brake on the surging run of DBS share price, which had been on course to tip the $50 mark, just in time to coincide with the 50^th anniversary celebration of DBS.

With a market capitalization of $67 billion, DBS is Singapore’s largest cap stock, followed by SingTel and OCBC. All three counters suffered from sharp corrections simultaneously in recent weeks, presumably due to short-sellers’ attacks. Among the three counters, OCBC fared the worst, falling by as much as 17.5%, followed by SingTel’s 16.6% and DBS’s 14.4%. On this note, DBS share price has held up relatively well, demonstrating its strength and depth.

The question now is: when will DBS share price return to form? In my own opinion, a lot will [This is a premium article. The rest of the content is blocked and can be accessible by SG Wealth Builder Members only. To read the full content, please sign up as member.]

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