Latest news with #UOB
Business Times
8 hours ago
- Business
- Business Times
DBS, OCBC, UOB Q2 results likely to be weighed down by lower interest rates
[SINGAPORE] The trio of local banks will likely post weaker results for the second quarter of 2025, weighed down by lower net interest income from falling interest rates, analysts said. They are expected to post their Q2 financials next month, beginning with OCBC on Aug 1 and followed by DBS and UOB on Aug 7. Net interest margins (NIMs) will probably be 'materially lower' in Q2, said Thilan Wickramasinghe, head of research and regional financials at Maybank Securities Singapore. He noted that the Singapore Overnight Rate Average (Sora) was down 50 basis points – due to 'massive' domestic liquidity, partly because of safe haven inflows – while the Hong Kong Interbank Offered Rate (Hibor) was at its lowest since 2022. The Sora decline provided only partial relief in funding costs, as banks 'weigh off preserving market share', he said. DBS Group Research analyst Lim Rui Wen also expects NIMs to fall quarter on quarter by a high single digit, due to the lower Sora and Hibor. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up The rates' impact will likely be more pronounced as more loans get repriced against reduced benchmark rates throughout Q2, she added. However, she noted that OCBC's and UOB's repricing of their fixed-deposit and flagship deposit account interest rates should buffer falling asset yields in subsequent quarters. Wickramasinghe also pointed out that loan growth was better than expected in Q2, probably due to front-loading demand ahead of the expiry of US President Donald Trump's tariff moratorium. While this may partially offset downsides in net interest income, it is unlikely to arrest sequential decline, the researcher said. Trump impact Analysts also said that Trump's 'Liberation Day' tariffs in April likely weighed on market sentiment, impacting wealth management fees in turn. Tay Wee Kuang, an analyst at CGS International, said that macroeconomic uncertainty could continue to dampen fee income in the second half of the year, despite equity market sentiment having slowly recovered. Nevertheless, Lim of DBS expects wealth management income to remain a tailwind for Singapore banks in the medium term, as wealth management activity began recovering in May. This is also supported by ongoing growth in assets under management (AUM), she said. 'The investible portion of AUM is expected, as clients reallocated funds from fixed-deposit rates and (treasury-bill) rates, which continue to see declining rates through Q2.' Wickramasinghe likewise expects sequential improvements in wealth management fees, given falling domestic benchmark rates and risk-on market conditions. He added that significant volatility around foreign exchange, trade and interest rates would likely have supported trading income in Q2, which could surprise on the upside, especially for DBS and UOB. Higher credit costs Meanwhile, the three banks' credit costs could trend towards the higher end of their respective 2025 guidance, due to weakness across Asean economies such as Thailand and Indonesia , said Tay. 'However, we do not expect total credit costs to change drastically quarter on quarter, as we believe the pre-emptive general provisions recognised by the Singapore banks in Q1 should remain sufficient amid the current credit cycle,' he added. Ongoing reviews of second-order impacts from the US tariffs may also lead the banks to maintain or increase their general provision buffers, said Lim. Therefore, general provisions write-backs are unlikely this year, she noted. CGS International and Maybank Securities kept their 'neutral' call on the Singapore banking sector, with Tay noting that the lenders lack growth catalysts in an uncertain economic outlook. The analysts expect UOB to restore its guidance for 2025, which it had suspended in Q1. They are also awaiting more clarity from OCBC on its strategy, following its failed bid to privatise its insurance arm, Great Eastern . Clarity around returns may also take longer to resolve due to the lender's 'unexpected leadership change ', Wickramasinghe said. But Lim, who has 'hold' calls on OCBC and UOB, expects the banks' dividend yields of up to 6.5 per cent to continue supporting share prices. 'As asset quality remains largely benign, and dividend yields stay attractive, comparable to Singapore real estate investment trusts, we expect share prices to remain well-supported in a low interest-rate environment and due to the safe haven appeal of the Singapore dollar,' she said.
CNA
21 hours ago
- Business
- CNA
Former bank employee, insurance agent and private-hire driver jailed for cheating 13 out of S$1.2 million
SINGAPORE: A man who worked as a bank employee, insurance agent and later private-hire driver cheated 13 victims out of S$1.2 million (US$935,000) in investment scams over four years. Benjamin Chua Sian Yang, a 37-year-old Singaporean, was sentenced on Monday (Jul 28) to jail for six years and three months. Chua pleaded guilty to three charges of cheating, with another five charges taken into consideration. The court heard that Chua was an insurance agent with Aviva in 2018. Before this, he was a relationship manager at UOB and a personal banker at Citibank, but the dates for these jobs were not provided in court papers. Since at least 2017, Chua started working as a private-hire driver for additional income. He got to know some of his victims through his work at UOB or Aviva, when they were his clients. He also snagged some victims when he ferried them in his private-hire vehicle and talked to them about investment and finance. He gave an impression that he was a successful forex trader so that they would be interested in investing with him. Around July 2021, he was fired from his job at Aviva. He opened a demo account with IG Brokers Singapore without a Capital Market Service Licence and used the demo account returns to convince victims to invest with him. He would send screenshots of alleged projected returns, promising high returns which he knew could not be generated and offering attractive interest rates he knew were impossible to achieve. To keep up the charade, Chua sometimes gave the victims sums of money that he generated through other means. He also gave gifts to the victims such as iPhones, to entice them to continue investing with him. The first police report was made against Chua in April 2021. He was investigated but continued to scam others until August 2023, using the money for things like gambling, buying collectables and personal expenses. Between February 2019 and August 2023, he cheated S$1,233,290 from 13 victims. These include a 67-year-old primary school teacher, a 66-year-old physician and a 55-year-old hawker. One of the largest sums he cheated was from a 47-year-old freelance stylist, who gave him S$260,000 in total. She had met him when he ferried her in his vehicle in May 2017, introducing himself as an Aviva financial advisor. Between 2017 and 2018, she spoke to him over text and in person about financial matters and stocks and later made investments through him. He later lied to her that he had started his own trading platform in stocks and shares and got her to invest with him multiple times. One of these included a purported investment in stock in the aviation sector with a minimum S$60,000 principal, to earn S$700 repayment every two weeks, with a free iPhone. The woman transferred the sum to Chua and received the free iPhone, but did not get any of the promised interest or the principal returned. Chua was arrested on Aug 22, 2023 and later remanded from Feb 12 this year. The prosecution sought 76 to 84 months' jail for Chua, noting the sum involved, the number of victims and the length of offending. Chua abused the trust of many victims who had been long-time clients of his while he was still working at reputable establishments, said the prosecutor.
CNA
a day ago
- Business
- CNA
CNA938 Rewind - Stock take today: EU-US preliminary deal, US week ahead
On the daily markets analysis on Open For Business, Andrea Heng and Susan Ng speak with Heng Koon How, Head of Markets Strategy, Global Economics and Markets Research, UOB.
Yahoo
a day ago
- Business
- Yahoo
The Straits Times Index Has Cracked the 4,200 Level: Is There Room for Further Gains?
The Straits Times Index (SGX: ^STI) posted a sterling performance year-to-date (YTD) as it broke multiple record highs. Earlier this month, the bellwether blue-chip index crossed the 4,000-mark for the first time as it recovered from April's tariff announcement. Just this week, the index has shot past the 4,200 level and shows no sign of stopping. Can this rally sustain, or should investors stay cautious for now? We unpack these developments to bring you some insights. A broad-based rally The surge in the STI is impressive, but investors may be surprised to note that the three local banks are not responsible for the bulk of this rise. DBS Group (SGX: D05), which occupies the largest weight within the STI at 25.1%, saw its share price increase by a little under 10% YTD. *Note: All weights are as of 31 March 2025. The next largest index component, OCBC Ltd (SGX: O39), takes up 16.3% of the index while Singapore's third largest bank, United Overseas Bank (SGX: U11) or UOB, had a weight of 12.4%. OCBC's share price increased just 3.4% YTD while UOB's shares inched up 1.9% YTD. Hence, it's clear that the banks have not contributed much to the index's stellar performance. So, the question is – which stocks did the heavy lifting this time? One example is Singapore Technologies Engineering (SGX: S63). The engineering firm's shares soared 77.9% YTD to hit S$8.27. Several other blue-chip stocks also posted strong share price gains. Property developers did well, with UOL Group (SGX: U14) surging 34.9% YTD and Hongkong Land (SGX: H78) soaring 42.9%. Sembcorp Industries (SGX: U96) leapt 41.8% YTD while Singapore Exchange (SGX: S68) saw its shares increase by 26.2% YTD. Local telco Singtel (SGX: Z74) also posted a strong performance with its share price jumping 33.7% YTD. Awaiting the banks' results These performances were achieved even when there were no major corporate announcements or earnings results. This suggests that the optimism could be related to the recent announcement of a large, S$1.1 billion capital injection by the Monetary Authority of Singapore to revitalise Singapore's stock market. There could be room for the rally to continue if the banks do report robust results. OCBC will report on 1 August while both DBS and UOB will announce their first half and second quarter earnings on 7 August. With interest rates set to hover 'higher for longer', the lenders could enjoy an unexpected tailwind if they can maintain their net interest margins. Fee income should also stay strong with wealth inflows into the region along with buoyant credit card spending. As for the rest of the STI's components, investors will also be keeping a close eye on their business updates and earnings announcements as the earnings season gets underway. Strategic reviews to unlock further value A catalyst that could take share prices higher is strategic reviews and long-term plans announced by several blue-chip players. Some companies also communicated their long-term objectives via Investor Day sessions that give investors a clearer idea of what to expect. For instance, ST Engineering released its Investor Day 2025 slides earlier this year and came up with another set of ambitious targets for 2029. The engineering giant also announced a progressive dividend policy that will add an incremental dividend based on one-third of the year-on-year increase in net profit from 2027 onwards. Hongkong Land also announced its strategic review late last year and has followed through with it by posting a higher year-on-year dividend for its 2024 results. Sembcorp Industries went a step further. The utility and urban development group not only announced its 2028 targets during its Investor Day 2023, but also announced a corporate reorganisation earlier this year. These developments injected a much-needed dose of optimism as investors witness clear progress towards attaining these goals. Singtel also reported a higher year-on-year dividend for fiscal 2025 and announced a S$2 billion share buyback programme to unlock more value for shareholders. Investors will be closely scrutinising the upcoming earnings season to determine if these companies can continue to report higher profits, free cash flow, and dividends. Get Smart: Monitor the business closely If you are afraid of a pullback in the STI, you are not alone. Some investors have expressed doubts about whether this surge is sustainable. One piece of good advice is to monitor the business behind the stock. If the business does well, the share price should naturally follow. Singapore's stock market is on a historic run, but can it last? We'll explore where interest rates are heading, whether blue-chip earnings can keep growing and more. Get the clarity you need — sign up now for our free webinar. When the market is unpredictable, where can you park your money with confidence? Our latest FREE report reveals 5 Singapore dividend-payers built to withstand global storms. Get it now and see what's still worth holding. Follow us on Facebook, Instagram and Telegram for the latest investing news and analyses! Disclosure: Royston Yang owns shares of DBS Group and Singapore Exchange. The post The Straits Times Index Has Cracked the 4,200 Level: Is There Room for Further Gains? appeared first on The Smart Investor. Sign in to access your portfolio
Business Times
4 days ago
- Business
- Business Times
STI falls on Friday, in tandem with most regional indices; STI down 0.3%
[SINGAPORE] The Straits Times Index (STI) closed lower on Friday (Jul 25), mirroring most regional indices. The STI fell 0.3 per cent or 11.99 points to 4,261.06. Across the broader market, advancers outnumbered decliners 335 to 245 after 2.2 billion shares worth S$1.8 billion changed hands. The trio of local banks closed lower on Friday, with DBS down 0.3 per cent or S$0.15 at S$49.06. UOB dropped 0.6 per cent or S$0.21 to S$37.15 and OCBC ended 0.5 per cent or S$0.09 lower at S$17.18. City Developments was the top gainer on the STI, closing up 2.9 per cent or S$0.18 at S$6.38. The biggest loser was Sembcorp Industries closing down 1.5 per cent or S$0.12 at S$7.72. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up Across the region, major indices were mostly down, with only the Kospi up 0.2 per cent and the Nikkei 225 down 0.9 cent. Hong Kong's Hang Seng Index closed down 1.1 per cent and the KLCI down 0.4 per cent. The markets are turning cautious as the US and China enter trade talks next week in Stockholm, Sweden, said Stephen Innes, managing partner at SPI Asset Management Officials will try to stitch a deal together before the Aug 12 expiry, and there are some tricky issues to navigate namely Chinese industrial overcapacity and relief on export controls and access to more AI components. The 15 per cent tariff pact between Japan and the US is aiding the White House narrative that tariffs are levers and not a lid, he added. 'The fact that Beijing just suspended its antitrust probe into DuPont's China unit may be more than a token – it may be a breadcrumb along the path to détente,' said Innes.
