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DBS share price suffered from explosive meltdown

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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?

DBS share price

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 50th 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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Updated: July 5, 2018 — 4:42 pm

6 Comments

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  1. May I correct you that the last time that a correction of such magnitude was back in 2015, Jul 23 – Oct 2, a decline of 26.6% and a further decline to $13.01 on 12 Feb 2016.
    That’s a total decline of 39.5% in half a year.

  2. And the government just announced cooling measures today?

  3. Hi Roseate,

    Thank you for pointing out and you have made a good point!
    I have amended the article to reflect the decline in 2016. Thank you so much once again. Really appreciate it.

    Regards,
    Gerald
    https://www.sgwealthbuilder.com

  4. Hi Boon Sheng,

    Haha! You are right! I did not expect the government to implement another round of cooling measure! 12% ABSD is really a lot!! This is going to be real bad for the local banks because I think it will hit the housing loans big time.

    Regards,
    Gerald
    https://www.sgwealthbuilder.com

  5. Hi Gerald,

    I enjoy reading your articles because they are always so clear (you explain concepts very well for a layman person like me) and enlightening.

    May I check where do you obtain the data on total value of “short” funds ? I remember reading somewhere that SGX said they are going to publish these information but I may be wrong.

    Thank you.

  6. Dear Kian Tong,

    Thank you for your comments and really appreciate for being a long-time member of SG Wealth Builder!

    The short-selling data is extracted from the SGX website under the “Market Information” tab. In there, you can search for “Marking of Sell Orders”.

    However, please note that SGX will be replacing the website in a few months time. So, I am not sure where the data will be located in the new SGX website.

    Regards,
    Gerald
    https://www.sgwealthbuilder.com

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