OCBC share price plunged into chaos

LIFETIME MEMBERSHIP What a bombshell revelation. On 23 February 2022, OCBC share price got ripped apart after the bank released its FY2021 financial result. It was supposed to be the day that investors pop the champagne. Instead, investors were horrified to see OCBC share price plunging by as much as 6% on that fateful day.

To rub salt into injury, OCBC share price bucked the trend of DBS and UOB shares, which increased on 23 February. This was the first time that DBS and UOB share prices rose while OCBC share price got bombed out. For years, these three counters had always moved in tandem. Evidently, investors ran for their lives, sending OCBC share price straight to the gallows.

OCBC share price

The subject of debate at here is: does the FY2021 result really justify the collapse of OCBC share price? Okay, the venerable bank missed the estimates of most analysts (including mine). But surely that doesn’t warrant the explosive meltdown of OCBC share price? We are talking about a financial institution that raked in higher net profit of $4.86 billion. If you claim that the bank suffered a financial loss over the year, I would have accepted the meltdown. But clearly, this is not the case.

In the stock market, sentiment plays an important role. The crisis of confidence in OCBC share price stemmed from several factors. Firstly, the invasion of Ukraine by Russia had rattled global stock market confidence on 24 February 2022. Global stock markets got routed and Straits Times Index fell 3.5% on that fateful day. OCBC share price was not spared from the carnage as the counter collapsed 4.5%.

In addition to the unfolding war, market reactions were adverse for OCBC share price following the release of FY2021 result, which saw net interest income dropping 2% year-on-year. The increase of 35% in net profit was also the lowest among the three banks. And then after spending hundreds of million doing share buybacks in 2021, ROE remained below 10%. To compound further misery, there was no special dividend in the absence of acquisitions. All these upset investors to no end. It seems that CEO Helen Wong has a lot of explanations to do.

Given the recent correction in OCBC share price, is it a good opportunity for investors to accumulate? In this article, I will share my views on the outlook for OCBC share price.

OCBC share price on fire!!!

OCBC share price to hit $19 by end 2022?

OCBC share price on the rage!

OCBC share price in supersonic boom!

OCBC share price to rocket with record earnings?

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, so my views on OCBC share price may be biased.

OCBC share price ambushed by short-sellers

Short-sellers wasted no time in punishing OCBC share price. On 25 February, the short volume amounted to a staggering 8 million. On 24 February, the short volume was 7.1 million, which is higher than the 6.1 million recorded on 23 February. Prior to these, the short selling volume amounted to only 1.2 million on 22 February. On this basis, the short selling activities should be the culprit behind the collapse of OCBC share price for the past three days, thereby weighing the STI.

BullionStarAccording to SGX Securities Borrowing & Lending Programme (SBL), investors had loaned a mind-boggling [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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4 thoughts on “OCBC share price plunged into chaos

  • February 27, 2022 at 7:33 pm
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    Hi Gerald, a PE of 14 is rather high for OCBC. Maybe 12 is more reasonable.

  • February 27, 2022 at 11:28 pm
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    $1.37×12=$16.4, still much higher than the TP $15, given that DBS estimates so.

  • February 28, 2022 at 8:01 am
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    Hi Leo,

    Apologies, you are right. I was actually referring to my exit price of $14 as compared to DBS target price. My forward PE of 14 is indeed aggressive but lets see how the Fed will hike interest rates to fight the soaring inflation.

    Regards,
    Gerald
    https://sgwealthbuilder.com

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