Amid the raging inflation and uncertainty inflicted by the ongoing Russia-Ukraine conflict, market sentiments had been gloomy in the past three months. And rightly so. After all, many analysts had previously predicted that 2022 could be the year of global recovery from the devastating pandemic. But the Russia-Ukraine conflict had emerged out of nowhere to torpedo global stock markets. Of course, DBS share price was not spared from the fallout.
Despite the chaos in the market, DBS share price appreciated 6.8% year-to-date. Looking back, DBS share price had been on a rather bullish form in the start of the year. Investors had bought into this counter with anticipation of a stellar full-year FY2021 result. And the bank delivered. Then again Man proposes, God disposes. Unexpectedly, Dow Jones fell 500 points on 11 February 2022 following news of a potential Russian-Ukraine conflict. In the aftermath, DBS share price had a minor correction.
Investors’ worst nightmare came true as the Russia’s “special military operation” in Ukraine unfolded. As a result, DBS share price tumbled from a high of $37.20 on 14 February to a low of $31.20 on 8 March, representing a correction of 16% within the span of three weeks. Yet the announcement of the much-anticipated 0.25% interest rate hike by the US Federal Reserve on 16 March had rescued DBS share price from the gallows. Then on 22 March, the Federal Reserve warned that it is prepared to hike subsequent interest rates by more than 50 basis points to fight inflation. The turn of events must have been a whirlwind for investors!
The booster shot for DBS share price came from its FY2021 financial performance as the record earnings provided a key support for DBS share price. As a growth stock, most investors should place more premium on the top-line growth rather than the bottom-line. However, Singapore bank stocks are a different animal from US growth stocks as local banks usually issue dividends to reward shareholders. In this regard, higher net profit may lead to higher dividends. The annualised dividend for DBS rose to $1.44 per share, representing an increase of 9%.
As expected, DBS announced a record earnings. Net profit amounted to a record $6.8 billion. The net profit is more or less in line with my projected amount of $6.9 billion. As a reward, CEO Piyush Gupta was given a salary package amounting to $13.6 million. Against this backdrop, DBS CEO can laugh all the way to the bank.
Piyush Gupta joined the bank in November 2009. In the blink of an eye, 13 years had passed. Under his helm, the Singapore bank has enjoyed a decade of tremendous growth. Of course, there were challenges along the way, such as the European debt crisis (2011-2012), the oil slump (2014-2016), the trade war between USA and China, pandemic and the unfolding Russia-Ukraine conflict. Somehow, the DBS CEO managed to steer the bank to safe harbour, growing the bank to an even bigger scale than what it was ten years ago. Question now is: will DBS share price ever hit $50?
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.
Big catalysts for DBS share price
In Piyush Gupta’s 3QFY21 conference call, the management revealed that [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.]
For members of SG Wealth Builder logging in from Apple or Mac devices, please access through this link. This allows for one-time log in only (instead of having to key in user-id and password twice).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.