LIFETIME MEMBERSHIP It seems that OCBC share price (SGX: O39) have lost its way. On 3 November 2021, the local bank released a set of financial result that saw 3rd quarter’s net profit rose by an impressive 19% year-on-year to reach $1.22 billion. Nine months’ net profit rose by a staggering 58% to $3.88 billion. With such a solid performance, most investors would have popped the champagne. Yet OCBC share price (SGX: O39) confounded investors by retreating 0.75% on that fateful day.
To be honest, the tepid performance of OCBC share price (SGX: O39) is truly bizarre. Like many investors, I had expected plenty of fireworks for OCBC share price (SGX: O39) following the release of the excellent 3rd quarter business update. I do think that it is reasonable to expect OCBC share price (SGX: O39) when you see such good result. But then again, Man proposes, God disposes. OCBC share price (SGX: O39) went missing in action instead.
The trend of OCBC share price (SGX: O39) is eerily similar to that of Wilmar, another Straits Times Index heavyweight. In October 2020, Wilmar share price suffered an explosive meltdown following the hugely successful listing of Yihai Kerry Arawana Holdings Co., Ltd (YKA). Then in February 2021, Wilmar share price lost form unexpectedly following the release of a set of great financial result.
Like OCBC, Wilmar management also went on the offensive to defend Wilmar share price and bought back a whopping 50.4 million Wilmar shares. As for OCBC, the management bought back 21.48 million of OCBC shares so far. CEO Helen Wong was forced into the titanic rescue mission of OCBC share price (SGX: O39) as the 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 (SGX: O39) triggered the management to embark on a series of share buybacks.
While the aggressive shares buybacks provided critical support for OCBC share price (SGX: O39), the bank will always be judged based on its financial performances. Hence, if the latest financial result could not lift OCBC share price (SGX: O39), it will be difficult to find the next catalyst for this counter. In this article, I would share my insights on the two plausible factors for the weakness in OCBC share price (SGX: O39).
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: 039) needs mojo
While the performance of OCBC share price (SGX: O39) has been disappointing, the bank did not fail to deliver in terms of business performance. Net interest income increased 3% year-on-year to $1.461 billion while allowances dropped 54% to $163 million. The strong core banking performance suggested that the worst is over for OCBC bank. However, there is a need to caution that past performances are not a good indicator of future performance. The road ahead for OCBC share price (SGX: )39) could be challenging.
Upon deeper examination on the financial update, I have some concerns pertaining to 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.]LIFETIME MEMBERSHIP
Congratulations on your first step to becoming part of SG Wealth Builder community! For a one-off payment of $200, you can get full access to all the articles and enjoy the benefits of SG Wealth Builder Membership.
The full benefits and privileges of SG Wealth Builder Membership:
- Access to the latest premium articles of SG Wealth Builder
- Email notifications of latest blog articles
- Request for coverage on stocks, insurance and other personal financial topics
- Comment in articles
Note: After payment is made, you will be prompted with registration form to create your user-id and personal password.