Lifetime Membership In stock market, October has a psychological effect on investors as some of the worst market crashes happened in this month – the stock market crashes of 1929 and 1987. If investors look back, Wall Street ripped the world apart with Dow Jones plunging by 832 points on 11 October 2018. Back then, Straits Times Index (STI) took the cue and fell by 84 points. Then in October 2020, Dow Jones collapsed by a whopping 2000 points. In this context, how will DBS Group Holdings share price unravel in October 2022?
Back in August 2022, I wrote that DBS Group Holdings share price could be in for a rough ride following the release of a set of new property cooling measures. True enough, the authorities did unleash a set of new cooling measures on 29 September 2022 to rein in the relentless rising property prices in Singapore.
In that article, I predicted that the loan-to-value (LTV) limit for bank loans would be lowered from 75% to 70%. Further, I was expecting the Additional Buyer Stamp Duty (ABSD) to be raised yet again. It turned out that the LTV limit for HDB loans and the Total Debt Servicing Ratio (TDSR) were tightened instead. In addition, private property owners who sold their properties will have to wait out for 15 months before they can purchase resale HDB properties.
In my assessment, the latest round of property cooling measures should have limited impact on DBS Group Holdings share price as the bank’s home loan pipeline should not be affected. In fact, the cooling measures may even be beneficial for the bank as they may help to curb the formation of non-performing loans. With this issue being done and dusted, investors must be looking at the upcoming 3rd quarter business update to assess the outlook of the bank.
Indeed, the current market sentiment has turned significantly darker as investors are concerned that the US Federal Reserve may have miscalculated its interest rate hikes, thereby pushing the US economy to the brink of a recession. For this reason, DBS Group Holdings share price has increased by only 2.4% year-to-date despite three consecutive 75 basis point hikes by US Federal Reserve.
The first week of October saw massive volatility for US’ Dow Jones, which rocketed 2000 points to 30,300. But the gain vaporized within days as the index suffered meltdown to 29,500. On the same note, our Straits Time Index (STI) went through similar bout of volatility, albeit on a smaller scale. We are only in the first week of October, so investors should not pop the champagne so early as we are not out of the woods yet. To be on the safe side, investors should brace for more volatility ahead for DBS Group Holdings share price.
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 Group Holdings share before. Whether DBS Group Holdings 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 Group Holdings share price faces headwinds
With pandemic fading into a distant memory, the market is now confronting two major challenges – the fallout from surging interest rate hikes and the Russian-Ukraine conflict. For the banks, rising interest rates serve as a catalyst for growth, so I am not so concern about its impact on DBS Group Holdings share price. As for Russian-Ukraine conflict, the bank’s exposure and collateral damages had been limited so far. Of most concerning to me is 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
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