Chinese New Year Special Offer! DBS will release its full-year FY2021 financial result on 14 February 2022, before the market opens. When a listed company releases its financial result before market opens, it usually means one thing – the result should be good. In this regard, investors should expect plenty of fireworks for DBS share price.
DBS share price has been on a solid bull run for the past few weeks that not even the MAS’ regulatory action on its digital disruption in November 2021 could derail its bullish form. Year-to-date, DBS share had increased 13.6% to $37.25. With the stellar full-year financial result, it is not inconceivable that DBS share price would hit $50 in the coming weeks.
It has not been a bed of rose for investors as DBS share price had previously endured a torrid run in late 2021 following market’s reaction to a subpar 9MFY2021. Omicron had emerged out of nowhere to create much uncertainties for DBS share price. And with the occurrence of the online disruptions, we have the perfect storm for DBS share price.
Then again, no winter lasts forever. For DBS share price, this is no exception. Investors were relieved that MAS’ regulatory action requires DBS to set aside additional capital amounting to $930 million. The bank assures investors that it will have no impact on the dividend policy. To put the icing on the cake, the acquisition of Citibank Taiwan is expected to accelerate growth, adding at least $250 million of net profit per annum post-pandemic.
But the strongest catalyst for DBS share price should be the looming interest rate hikes by US Federal Reserve. On 27 January 2022, the US Federal Reserves indicated that the interest rate hikes will likely take place in March. The interest rate hikes will benefit Singapore banks because of the increase in net interest incomes. For this reason, the interest rate hike news sent DBS share price to the moon.
In CEO Piyush Gupta’s conference call for 3rd quarter financial result, the management revealed that for a 100 basis point US dollar rate hike, DBS would be raking in “a $2 billion increase in net interest income, the bulk of which will be in the first year”.
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. Furthermore, I am not vested and have never invested in DBS share before. Whether DBS 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.
DBS share price to the moon!
While the ongoing pandemic continues to pose market uncertainties, DBS share price has been shining with the recovery of Singapore economy which grew 7.2% in 2021. The transcript of the latest conference call revealed that the US Federal Reserve interest rate hike will be a formidable tailwind for DBS share price, potentially pushing the counter to a high of $50 in 2022.Net profit amounted to $5.4 billion for 9MFY2021. Assuming DBS recorded net profit of $1.5 billion in 4th quarter, the full-year net profit would be $6.9 billion. This would translate to earning per share of $2.70. Thus, the projected DBS share price should be about [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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