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OCBC Investment Research on Thursday upgraded its call on DBS Group Holdings to a "buy" rating, while maintaining its fair value estimate at S$22.50.
The broker noted that DBS's share price had fallen from a two-month high of S$22.25 to a low of S$20.38 on Wednesday, translating to a decline of 8.4 per cent.
The current price correction presents an opportunity to accumulate the stock, OCBC said.
In its report, OCBC Investment Research noted that the Straits Times Index (STI) has dropped about 3.7 per cent during the same period, and that DBS fell more than its competitors OCBC and UOB, which declined by 4.1 per cent and 5.6 per cent respectively.
This higher-than-average slump could be attributed to market concern over its oil and gas provisions, and recent market jitters over North Korea's nuclear tests.
However, there are some positive recent developments. DBS's second-quarter results showed its wealth segment performing well. And with strong market performance in the third quarter, fee-based income momentum and strong wealth income can continue. The bank's wealth business will be driven by the addition of ANZ.
While the oil and gas outlook is challenging, the local property market has improved recently with more transactions and en-bloc sales, OCBC said.
As at 11.17am, DBS Group's shares stood at S$20.29, down nine Singapore cents or 0.44 per cent from Wednesday.