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DBS, OCBC, UOB are weighing down the STI

Weaker economic activity and peaking interest rates could reverse the big profitability gains charted by the three banks

Ben Paul

Ben Paul

Published Mon, Dec 11, 2023 · 05:00 AM
    • One reason the local banks are lagging the STI is central banks are expected to cut interest rates as growth and inflation ease.
    • One reason the local banks are lagging the STI is central banks are expected to cut interest rates as growth and inflation ease. PHOTO: BT FILE

    IT HAS been a pretty good few weeks for stocks. The S&P 500 index has bounced 11.8 per cent from its Oct 27 low, thanks in part to a significant pullback in 10-year US Treasury bond yields from a peak of 5 per cent.

    The Straits Times Index (STI), however, is up only 1.9 per cent from its Oct 23 low – no thanks to the three Singapore banks, which account for nearly half the local benchmark index.

    DBS has fallen 4.3 per cent since Oct 23, making it the worst-performing component of the STI during the nearly seven-week period. OCBC and UOB have slipped 0.5 per cent and 0.1 per cent, respectively.

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