Apparently, the management of OCBC Bank decided to press the panic button. On 10 May 2019, OCBC announced a set of pretty decent Q1FY2019 results that saw net profits rising 11% to $1.23 billion. Despite the rosy report card, dark clouds loom head for OCBC share price as chilling effect of the property cooling measures is starting to take effect. To rub salt to injury, the issue of the ailing oil and gas sector has returned to haunt OCBC share price yet again. Against this backdrop, management had decided to launch a rescue mission for OCBC share price.
To be fair to the management, OCBC had achieved a breakthrough in the latest quarter as net interest margin has increased to 1.76%, up from 1.67% in Q1FY18. Return on equity (ROE) for 1Q19 has also improved to 12.0%, as compared to 11.8% in 1Q18. In view of such impressive performance, OCBC share price should be bullish. Yet since the release of the latest financial results, OCBC share price had slumped from $11.40 to the current $10.95.
In my view, the recent correction of OCBC share price is not unique to the bank alone.Read more