What a calamity out of nowhere! DBS Group Holdings share price looks set for another bout of volatility with the unfolding coronavirus saga. Investors could be forgiven for punching the wall as this counter had barely emerged from the persistent Hong Kong riots when the coronavirus took the world by storm. Will the upcoming financial result be a cup of hot milo in the winter for investors?
As the bellwether of the economy, the banking sector is very susceptible to economy condition. It is still too early to judge whether this coronavirus will pose a short or long-term challenge for Singapore economy. But one thing for sure is that DBS Group Holdings share price will come under pressure in the coming months because of its significant exposure to the Hong Kong market, which had been roiled by the civil unrests, recession and the coronavirus.
In recent years, Hong Kong had emerged to be an important market for Singapore banks, particularly DBS Group and OCBC. The start of the Hong Kong protests in July 2019 saw DBS Group Holdings share price correcting to $24 by end of August 2019. Since then, DBS Group holdings recovered to rise to $26 in January 2020. Of course, the recovery wasn’t linear but the trend demonstrated the resilience of DBS Group Holdings share price.
The combination of a slow down in both Singapore and Hong Kong economy is indeed a perfect storm for DBS Group Holdings share price. But fortune favours the brave. To make money from the stock market, investors must be able to buy low and sell high. Question now is: what is the bottom for DBS Group Holding share price?
Note that this is an opinion article and not meant to be a financial advice. Please do your due diligence or engage financial advisors before investing in the stock market. Furthermore, I am not vested and have never invested in DBS Group share before. Whether DBS Group share price will surge or collapse has no impact on me. Thus, this article is not meant to induce readers to make any form of investment decisions.
DBS Group Holdings share price huffs and puffs
The coronavirus came at a time when DBS Group Holdings share price grappled with triple whammy of Hong Kong protests, Singapore property market cooling measures and cuts in US Federal Reserves’ interest rates. Some analysts have also cited the impending entry of digital bank players as potential disruption for DBS Group, but I beg to differ on this because I don’t expect the new players to encroach on the incumbents’ bread and butter.
Despite the dreadful headwinds, the management did not conduct major rescue missions for DBS Group Holdings share price. Within the last six months, only two share buy-backs were conducted – one in December 2019 (500,000 shares) and the other in August 2019 (550,000 shares). Interestingly, the range of DBS Group Goldings share price repurchased fell in the range $24 to $25. This is the price range that [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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