Being the leading light of SGX, the form of DBS Group share price has a major influence on the Straits Times Index (STI). Year-to-date, STI has increased by a mere 1.26%. Similarly, DBS Group share price has been on a sluggish form, increasing incrementally by just 1.09%. After seeing off the devastating COVID-19 pandemic in May 2022, the continuing tepid form of DBS Group share price in 2023 must have left many investors feeling exasperated as many of them have anticipated 2023 to be the year of recovery for DBS.
Since 17 March 2022, US Federal Reserve had raised interest rates by 11 consecutive times. Rightfully, Singapore banks’ business should have benefitted from the aggressive interest rate hikes by US Federal Reserves due to higher interest income. Yet, DBS Group share price had hardly moved at all for the past one year – it was trading at $34.75 on 18 March 2022 vis-à-vis the $34.25 as at 4 August 2023. Indeed, DBS Group had delivered a series of excellent financial results in the past few quarters but it’ shares had flattered to deceive thus far.
In the latest release of financial result, DBS Group had delivered a set of stellar financial result again. Net profit for 2QFY2023 rocketed 48% year-on-year to smash a high of $2.69 billion. Dividend of $0.48 per share has been declared for the second quarter, an increase of 6 cents from the previous payout. The explosive performance led analysts to talk up the possibility of DBS Group achieving net profit of $10 billion for FY2023. Yet, once again, DBS Group share price had failed to take off. Needless to say, investors must be feeling disappointed at the performance of DBS Group share price.
With 5-year beta of 1.34, DBS Group share price is surely volatile. For example, the stock has tumbled from $36 in early February 2023 to a low of $30.30 in end May 2023 following news of $1.3 billion loan exposure to beleaguered Adani Group and the incident of online service outage. During that period, the collapse of four US banks had also ignited fear of a global financial crisis. All these combined to knock the wind out of DBS Group share price.
However, no winter lasts forever. DBS Group share price made a swift recovery from the low of $30.30 to stage a remarkable return, surging by a whopping 13% within the span of 2 months. On this note, it is possible to make money out of the volatility of DBS Group share price provided you set the right entry price. Based on the trend of the past 3 years, it seems that the support level for DBS Group share price should be around $30.
Given that the series of unfortunate events for DBS Group had passed and that the interest rate hikes had failed to ignite the shares, what may be the major catalyst that can propel DBS Group share price to $50? In my opinion, the answer may lie in the IPO of one of the digital assets of DBS Group. On 31 March 2022, DBS Group revealed its plan to list the asset in SGX pretty soon. In this article, I will share my insight on this exciting IPO of DBS’ asset.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 share before. Whether DBS Group 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 share price is ready!
Assuming that full-year net profit for FY2023 really did cross $10 billion for DBS Group, then the EPS would be $3.8759. This will translate to a P/E of 12.9 based on target price of $50. Though such a P/E is not demanding for DBS Group, it could be difficult for DBS Group share price to reach the magical $50 mark through financial results alone. To unlock the value of DBS Group share price, the management may need to IPO one of its digital assets, which is [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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