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Hot stock: DBS falls 3.4% on ex dividend basis, Hong Kong exposure

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Shares of Singapore's largest bank fell on Monday morning after the stock went ex dividend, and from the weight of its Hong Kong exposure as intensifying protests in the city drew a warning from its leader that the territory was nearing an "extremely dangerous situation".

SHARES of Singapore's largest bank fell on Monday morning after the stock went ex dividend, and from the weight of its Hong Kong exposure as intensifying protests in the city drew a warning from its leader that the territory was nearing an "extremely dangerous situation".

At  11.34am, DBS shares were down by 3.4 per cent or 88 Singapore cents to S$25.37.

Shares of DBS are now trading on an ex-dividend basis. This means that the shares are currently trading without the right to receive the dividend of 30 cents per share, as declared by the bank as part of its second quarter results.

For the most recent second quarter, Hong Kong accounted for 24 per cent of the group’s net profit, or S$385 million for the three months ended June 30. Out of the group’s total income of S$3.55 billion, Hong Kong contributed around S$707 million or 19.9 per cent.

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In 2018, DBS Hong Kong accounted for 20.8 per cent or S$2.74 billion of the group’s income, and 24 per cent or S$1.36 billion of the group’s net profit. Growth of its Hong Kong unit also outperformed Singapore in 2018.

Other Singapore banks were also trading weaker in the early morning trading session, with UOB down 0.5 per cent or 12 Singapore cents at S$25.88 cum dividend; and OCBC Bank down 1.2 per cent or 13 cents to S$11.08 cum dividend as at 12.28pm. 

Hong Kong leader Carrie Lam her first press conference in two weeks on Monday accused pro-democracy protesters of trying to "destroy" the city in a dramatic escalation of rhetoric after two months of rallies and clashes. The warning came amid more strikes and travel chaos with hundreds of flights cancelled and train services suspended.