OCBC share price to surge with 70% profit jump?

LIFETIME MEMBERSHIP OCBC share price is ready to rock again! In my previous article written on 5 February 2021, I wrote that OCBC share price could remain sluggish if the Monetary Authority of Singapore (MAS)’s measure on bank share buybacks is firmly set in place. Since that fateful article, the management retaliated by launching a series of shares buybacks. For sure, the slew of share buybacks by OCBC caught me by surprise. Nonetheless, the moves provided good support for the bullish run of OCBC share price.

Although the current bullish form of OCBC share price should be attributed mainly to the improving economic conditions, the resumption of the share buybacks will bode well for OCBC share price. In comparison to DBS and UOB, OCBC is considered the most aggressive when it comes to share buybacks in recent years. In fact, the series of share buybacks in March and April 2020 enabled OCBC share price to make a swift recovery from the low of $7.80.

OCBC share price

Incidentally, the share buybacks also occurred at a time when Deputy President and Head of Global Wholesale Banking Helen Wong will take over as Group CEO from April 15. With a recovering OCBC share price, it seems that the new CEO will start her tenure on a positive note. But of more interest to investors should be the bank financial performances, which could shape OCBC share price performances for the rest of FY2021.

Although the share buybacks will provide nice support for OCBC share price, they are unsustainable if the bank is unable to deliver good financial results. On this note, I think there is light at end of tunnel as net profits for OCBC bank increased for three consecutive quarters. Based on this trend, I am cautiously optimistic that 1st quarter financial result would be solid, thereby setting OCBC share price on fire once again.

Given the current raging form of OCBC share price, is it the right time to enter this counter? After all, the Price/Book Value has surged to 1.067. This means that OCBC share price is no longer being traded at levels below its book value. In this article, I will share my outlook for OCBC share price in 2021.

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. At this moment, I am not in OCBC. Whether OCBC 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.

OCBC share price ready to fly

I am of the view that OCBC share price will skyrocket in the coming weeks because of the upcoming release of 1st quarter result. Make no mistake, the coming result will be compared to last year’s, which took place during the onset of the COVID-19 pandemic.

Back in Q1FY2020, OCBC share price suffered meltdown following the announcement of a net profit of just $698 million. Given that the Group recorded a net profit of $1.13 billion for fourth quarter 2020, I projected that net profit for Q1FY2021 may reach $1.2 billion, representing a 70% increase year-on-year.

Another factor that could push up OCBC share price is the [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: April 16, 2021 — 11:20 pm

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