DBS’ continued run-up leaves peers OCBC, UOB in the dust
Shares of South-east Asia’s biggest banking group are more than 20% up in the year to date
[SINGAPORE] DBS shares hit a new all-time high on Thursday (Sep 11), climbing S$0.51 to S$53.24 under a minute after the market opened.
The Straits Times Index also hit a peak at 4,367.51 points, jumping 21.05 points within seconds of the start of trading on Thursday.
This followed a jump on Wednesday, when DBS hit its previous peak of S$52.87. That rise helped the STI to scale a high of 4,355.84 points.
“Income-seeking flows continue to support DBS, thanks to visible, sizeable dividends and deep liquidity,” said Charu Chanana, chief investment strategist at Saxo. “Yet with policy rates heading lower, the sustainability of that edge is in question as net interest margin compression could cap the dividend upside of Singapore banks.”
Chanana added that rate-cut beneficiaries like real estate investment trusts are also starting to look more interesting, with easing funding costs setting the stage for distribution growth.
Shares of DBS reversed gains and closed 0.3 per cent, or S$0.16, down at S$52.57. The STI also pared most of its gains, but closed 0.2 per cent or 9.36 points up at 4,355.82.
BT in your inbox
Start and end each day with the latest news stories and analyses delivered straight to your inbox.
The bank’s shares are more than 20 per cent up in the year to date, while the STI is now 15 per cent up since the start of 2025.
In comparison, OCBC is up 1 per cent year to date while UOB is down 2.4 per cent. Combined, the three banks comprise more than half of the STI.
DBS shares have been on an upswing since the bank released strong results for the second quarter. It posted a 1 per cent rise in net profit to S$2.82 billion, compared with S$2.79 billion from the year-ago period.
The earnings had marginally beat the S$2.79 billion consensus forecast in a Bloomberg survey of six analysts. The positive results helped the bank’s shares cross the S$50 mark for the first time last month.
In comparison, OCBC’s Q2 profit slipped 7 per cent to S$1.82 billion, while that of UOB fell 6 per cent to S$1.34.
A research analyst from RHB said that DBS has “done well” to protect its net interest income and earnings, adding that “strong dividend visibility” is likely welcomed by investors. The analyst cited remarks from the bank’s management that its S$0.24 increase in annual dividend per share (DPS) should be sustainable for 2026.
RHB forecast a full-year dividend per share of S$2.70 for FY2026, which incorporates the higher DPS and translates to a “very decent yield” of 5.1 per cent. There could be further upside to the yield, as RHB has yet to factor in DBS’ potential capital return dividends.
DBS last month also launched tokenised structured notes on the Ethereum public blockchain. This followed its launch of cryptocurrency-linked structured notes in September 2024 for eligible clients, alongside cryptocurrency options trading.
In June, it became the first listed company in Singapore to cross US$100 billion in market value.
Copyright SPH Media. All rights reserved.
