LIFETIME MEMBERSHIP Crisis? What crisis? Being the oldest bank in Singapore, OCBC has seen the ebbs and flows of Singapore financial landscape, overcoming crises after crises for nearly 100 years. The unfolding pandemic crisis is no exception. Yet as we enter the endemic phase, uncertainties engulfed OCBC share price (SGX: O39) over concerns of potential exposure over the China’s Evergrande Group.
OCBC owns two banks in China – Wing Hang Bank and a 20% stake in Bank of Ningbo. Thus, it is not unreasonable for investors to be worried over the potential fallout from the embattled Evergrande Group. To make matters worse, the bank had not made any official clarifications that it does not carry any bad debts from Evergrande, probably due to the banking secrecy law. Arising from the uncertainties, OCBC share price (SGX: O39) turned bearish from August to September 2021.
Nonetheless, the lethargic form of OCBC share price (SGX: O39) did not last long as Monetary Authority Singapore (MAS) confirmed that Singapore banks have “insignificant” exposure to Evergrande. Following this revelation, OCBC share price (SGX: O39) surged 3.5% from 5 October to reach $11.90 on 14 October. On the basis of the current form, it seems that OCBC share price (SGX: O39) will recover lost ground and could smash past $14 by year end.
With the removal of Evergrande uncertainties, the next event that could shake things up for OCBC share price (SGX: O39) should be the upcoming third quarter financial report. Based on relentless daily shares buybacks carried out by OCBC management for the past two months, I expect the coming quarterly report to be good. Otherwise, the management would have a hard time justifying the aggressive shares buybacks conducted in recent months. As of 13 October, the bank has bought back a staggering 21 million of its own shares.
CEO Helen was forced into the titanic rescue mission of OCBC share price (SGX: O39) as shares of the local bank had been the subject of brutal attacks by the financial big boys. For the month of August, OCBC topped the institution net sell list, with funds net selling $241 million worth of OCBC shares. The embattled OCBC share price triggered the management to embark on a series of share buybacks.
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. I am vested in this counter (holding 6000 shares at an average OCBC share price of $12.38), so my views on OCBC share price may be biased.
OCBC share price (SGX: O39) ready to fly?
Whether OCBC share price (SGX: O39) will turn on the style in the coming weeks will depend on [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.]LIFETIME MEMBERSHIP
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