OCBC share price rocketed amid acquisition rumors
Talk about being at the right time and right place! On 25 March, Singapore Prime Minister announced the ease of public health measures for the pandemic, thereby improving business sentiments for aviation, hospitality and F&B. The relaxation of measures should bode well for local banks due to the loan exposures to these sectors which had been hit by the pandemic. As the operating environment improved significantly, OCBC share price should enjoy some tailwinds in the coming months.
At the moment, OCBC share price should be at a turning point as the counter has largely factored in the Russia-Ukraine conflict and pandemic impacts. The series of interest rate hikes should be the key catalyst driving the share price upward. Is this a good opportunity to enter? I would say so if you have done your risk assessment and diversified your portfolio. Being the oldest bank in Singapore, this blue chip is an evergreen STI component that will withstand the test of time.
Looking back, the past two months had been an absolutely gut-wrenching ride for investors as OCBC share price plunged into chaos. The day of Russia’s ‘special military operation’ in Ukraine coincided with the release of OCBC’s full-year financial result for FY2021. Consequently, investors were horrified to see OCBC share price plunging by as much as 6% on that fateful day.
Prior to the severe correction of OCBC share price in the middle of February, the counter had topped the list of institutional fund house net buys for six consecutive weeks as institutional fund houses had been pouring funds into OCBC shares. Subsequently, 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. The sell-offs by the big boys led to OCBC being in the top ten institutional fund houses net sell list for four consecutive weeks.
Nonetheless, no winter lasts forever. The allure of the much-anticipated 0.25% interest rate hike by the US Federal Reserve on 16 March had rescued OCBC share price from the gallows. Then on 22 March, the Federal Reserve revealed that it is prepared to hike subsequent interest rates by more than 50 basis points to fight inflation. The announcement of the easing of pandemic measures also provided a vital booster shot for OCBC share price.
Given the turn of events, is it a good opportunity for investors to accumulate OCBC shares? Also, in early 2022, UOB and DBS made waves with their acquisitions of Citibank Group assets in the region. Will OCBC follow suit and unveil acquisitions to drive growth, thereby setting OCBC share price on fire? In this article, I will share my views on the outlook for OCBC share price in 2022.
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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 storming back in style
Even though OCBC share price had enjoyed an impressive recovery since 8 March 2022, the counter had not crossed its record level of $13.75 last seen in 20 April 2018. This is unlike DBS and UOB, which had surpassed their record levels in pre-pandemic times. In this regard, there should be some more steam left for the bullish run of OCBC share price.
On the other hand, how OCBC share price will unfold in the coming months will also depend a lot on [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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