Declines in DBS, OCBC weigh on STI, which closes marginally down
Across the broader market, losers outnumber advancers 317 to 250
THE Straits Times Index (STI) closed at 3,487.91 on Tuesday (Jul 16), down 11.98 points or 0.3 per cent, as declines in the shares of DBS and OCBC weighed on the benchmark’s performance.
Across the broader market, decliners outnumbered advancers 317 to 250, with 1.1 billion securities worth S$1.2 billion changing hands.
Shares of DBS, Singapore’s biggest local bank as well as its largest listed stock, fell 1.4 per cent to close at S$37.36 after UBS downgraded its call to “neutral” on limited upside.
UBS has a target of S$39 for DBS, which implies upside potential of roughly 4 per cent. DBS has gained 23.3 per cent this year, making it the third-best performer in the STI. The top performers are Yangzijiang Shipbuilding , up 63.8 per cent, and telco Singtel , up 23.5 per cent.
UOB is now UBS’ preferred pick among the three Singapore banks. UOB closed at S$33.06, up 0.3 per cent. OCBC ended at S$15.14, down 1.2 per cent.
The other big index mover was Yangzijiang Shipbuilding, which gained a standout 5.7 per cent to S$2.43 after announcing an agreement to buy land in China’s Jiangsu province for the construction of a yard dedicated to clean-energy ships.
DBS Group Research analyst Ho Pei Hwa raised her target price for the stock to S$2.75 from S$2.10 after applying a higher valuation multiple.
Ho believes the company could draw interest from funds with investment mandates focused on environmental, social and governance factors. It also has a consistently high return on equity of 20 per cent and a dividend yield of 3 to 4 per cent, she said.
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