OCBC share price to test $15?

LIFETIME MEMBERSHIP What a boisterous form for OCBC share price! In my previous article, I shared that OCBC share price could be on fire with the release of the first quarter financial result. Indeed, OCBC did not fail to deliver. Group net profit for 1QFY2021 of $1.50 billion was significantly higher than the $698 million a year ago.

But then again, Man proposes, God disposes. All local bank stocks, including OCBC share price, suffered a correction following news of the first COVID-19 case at Changi Airport. Since then, the growing number of infections linked to Changi Airport has turned it into the largest cluster in 2021. Against this backdrop, the narrative for OCBC share price turned sombre. From $12.60 on 10 May, OCBC share price tanked to $11.70 on 14 May. In this regard, volatility remains the name of the game for OCBC share price.

OCBC share price to surge with 70% profit jump?

OCBC share price in new dawn

OCBC share price

It certainly seems that the proverbial “sell in May and go away” syndrome is in play even as COVID-19 continues to rage in various countries. But the blip for OCBC share price did not last long as the Group embarked on an aggressive shares buyback mission to rescue OCBC share price. In the month of May alone, the bank conducted 13 share buybacks. As of 1 June, a total of 4.48 million of shares had been purchased from the market.

For perspective, DBS and UOB had not conducted any shares buybacks in 2021. Traditionally, 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.

Incidentally, the share buybacks also occurred at a time when Helen Wong took over as the Group CEO. With a recovering OCBC share price, it seems that the new CEO started her tenure at 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 for OCBC share price as net profits for OCBC bank increased for four consecutive quarters. Question now: is it the right time to enter this counter? After all, the Price/Book Value has surged to 1.11. This means that OCBC share price is no longer being traded at levels below its book value. In this article, I will share my insights on the outlook for OCBC share price in FY2021.

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 invested 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 avoided ambush

While most of the limelight is focused on the overall Group’s performance, a deeper dive into the operating results revealed that the bullish OCBC share price is attributed largely 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: June 3, 2021 — 9:52 am

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