DBS investors' dreams of Trump may face rude awakening
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Singapore
SINGAPORE'S biggest bank is riding on Donald Trump. Since the Nov 8 American election result, DBS Group Holdings Ltd has been the best performer among the 65 lenders on the MSCI Asia Ex-Japan Banks Index - up 20 per cent in US dollar terms, almost triple the gain in the benchmark gauge.
Something about the rally beggars belief. Why should investors in a Singapore bank get so excited about the Trump reflation trade when neither the dollar, nor the US bond market, is overly impressed? Singapore's own interest rates don't suggest a resurgence of pricing power over loans. The Singapore dollar swap offer rate, which jumped after the election, is again heading lower.
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