Chinese New Year Special Offer! Troubles come in troops for DBS Group Holdings share price. Looking back, the counter smashed a record high of $32.60 on 5 November following a splendid bull run. It certainly seemed that the sky was the limit for DBS Group Holdings share price. But unexpectedly, the wheels came off the wagon for DBS Group Holdings after the bank reported a subpar 9MFY2021 financial result that saw net income interest falling 9% year-on-year. The following Monday (8 November), DBS Group Holdings share price turned bearish.
Shortly after the release of the latest financial result, the bank suffered one of its worst service disruptions in the past decade, prompting Monetary Authority of Singapore (MAS) to mull taking regulatory actions against the bank in the coming days. The outage led to temporary crisis of confidence on DBS Group Holdings share price.
Just when investors thought that the worst was over for DBS Group Holdings share price, another nightmare unfolded. On 26 November, investors woke up to stunning revelation of a new COVID-19 variant that may be more contagious than the Delta variant. What spooked investors is that the variant could render current vaccines ineffective given its significant mutations. Due to the uncertainties, Straits Times Index (STI) suffered a carnage, and DBS Group Holdings share price was not spared from the market sell-offs.
From my assessment, I do not foresee the new variant to have a major impact on DBS’ core banking business. According to CEO Piyush Gupta, the loan exposure in FY2020 for aviation, oil and gas and SME sectors amounted to $6 billion, $23 billion and $39 billion. The major bulk of its loan portfolio is still concentrated in housing and building and construction. Hence, even if the authorities tighten the public health measures in the coming …