JP Morgan downgrades UOB to 'underweight', cuts target price

JP MORGAN has cut its rating on the stock of United Overseas Bank (UOB) to "underweight" from "neutral" on the grounds that its outlook is clouded by tighter regional liquidity, poorer asset quality and lack of deposit growth.

"These issues will likely persist, leading to lower quarterly earnings, at least for the rest of the year," JP Morgan said in a report issued on Aug 1.

UOB share performance has also outperformed the broader market year-to-date with a 14 per cent rise compared with the Straits Times Index's 7 per cent gain - providing a "catalyst for reversal", it added.