Is this the beginning of the end for DBS Group share price? On 13 February 2020, DBS Group finally unveiled it’s much anticipated fourth quarter results. Being the largest bank in Singapore, investors look to the bank’s FY2019 performance to gauge the outlook for DBS Group share price in FY2020. Many investors are also concerned whether the coronavirus outbreak will cast a dark shadow on DBS Group share price.
As the saying goes, past performance is not an indicator for the future. This is especially so, given that the latest financial result covers the performance of DBS Group until 31 December 2019 (the first reported case of coronavirus in Singapore was 23 January 2020). So investors will not be able to assess the impact of the coronavirus on DBS Group share price based on the latest financial result.
Good financial result for FY2019
In spite of the above, DBS Group recorded yet another stellar financial performance – full year net profit rose 14% to a record $6.39 billion. To celebrate the achievement, DBS Group proposed a final dividend of $0.33 per share. The annualised dividend will be $1.32 per share, representing an increase of 10%. The good news gave investors something to cheer about and lifted up the mood for DBS Group share price, which increased from $25.25 to $25.50.
With a 5-year beta of 1.5, DBS Group share price is one of the most volatile counters in SGX. If investors can stomach the volatility, this blue chip is definitely worth the risk because of its strong business fundamentals. Being a growth stock, DBS Group share price is particularly sensitive to its net interest income. Since 2011, the full year net interest income for DBS Group had consistently grown without fail. This explained why DBS Group share price had surged from $13 in 2011 to the current $25.50.
Will the coronavirus throw a spanner in the works for DBS Group share price in 2020? Should investors run for their lives or keep faith with CEO Piyush Gupta? In this article, I will share my thoughts on the outlook for DBS Group 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 share price faces destiny in 2020
For the past decade, CEO Piyush Gupta has grown DBS Group to become a more broad-based, resilient and diversified bank. Thus, it may not be appropriate to use the performance of DBS Group share price during the Great Financial Crisis in 2009 to gauge the outlook of this counter in 2020. In particular, the wealth management segment and Hong Kong unit had become major growth engines.
To illustrate the importance of Hong Kong market, the latest financial result revealed [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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