DBS Group share price thrashed by big boys

Troubles certainly come in troops for DBS Group share price. The recent Hong Kong protests would likely to inflict damage to its earnings for the second half of the year as Hong Kong market traditionally contributes the second highest profits to the Group (due to Dao Heng bank).

As Singapore economic growth is slowing down to 0 to 1% for 2019, DBS Group share price will also be among the first to be hit by a market slowdown. On the other hand, housing loans continued to fall because of the 2018 property cooling curbs. As of 30 June 2019, housing loans decreased to $73.9 billion from $75 billion in December 2018. But of more concern is the unfolding trade war between US and China, which threaten to derail DBS’ trade loan portfolio.

DBS Group share price

Against the above backdrop, can DBS CEO still laugh all the way to the bank? Maybe so. Given the massive run-up of DBS Group share price since 2016, CEO Piyush Gupta is still sitting on a healthy level of paper profits. Currently, the CEO holds 1.17 million DBS Group shares worth $29 million. Similarly, for those who entered this counter in 2016, they should see good capital appreciation for their investments.

But the question now is whether those who had entered earlier should cash in now or accumulate more DBS Group shares. Lately, DBS Group share price had been in jittery form as big boys came out in full force to thrash this counter. In the last week of July, a whopping high of 8 million DBS shares were shorted, sending DBS Group share price straight to the bottom of the cliff.

Great 1HFY2019 results

1HFY2019 saw trade asset volume decreasing by $68 million as compared to last year, signifying the current climate caused by the worsening global trade disputes. As institutional banking segment forms the largest profit contributor for DBS Group, the on-going trade war is going to weigh on DBS Group share price in the next few months. Despite this headwind, DBS Group share price managed to stay the course so far.

The reason why DBS Group share price remained resilient was because the Singapore bank managed to [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: August 22, 2019 — 2:37 pm

4 Comments

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  1. Hi Gerald, I would say your estimation is usually conservative, but who knows this time. However, the chance for Fed to further cut rates in the coming months is increasing. Let’s see what Jerome will say at Jackson Hole.

  2. Hi Leo,

    Agree with you that it is difficult to predict the interest rate outcome.
    Nevertheless, on the basis of the ROE for the past couple of years, I think DBS CEO did a pretty good job at the bank. Probably because of this, the stock price had been very bullish in recent years.

    Regards,
    Gerald
    https://sgwealthbuilder.com

  3. Hi Gerald, Thank you for your reply. A personal question please – which bank do you prefer the most? It seems OCBC is the cheapest, but the least recommended one. Any clue about it? Thanks.

  4. Hi Leo,

    Personally, I prefer OCBC because it is a growth cum value play. In addition, this counter is a dividend play too.
    OCBC stock is the “cheapest” because it has the highest number of issued shares (4.31 billion). Because of this, OCBC is relatively less volatile as compared to DBS and UOB. That is why many retail investors tend to think that this counter moves a tad slower than the other two counters. This is just my opinion.

    Regards,
    Gerald
    https://sgwealthbuilder.com

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