The analyst notes that the three month (3M)-Singapore Overnight Rate Average (SORA) growth was flattish, up 5 basis points (bps) m-o-m to 3.69%, where July’s recorded the smallest y-o-y growth in eight months of 265bps. However, July’s 3M-SORA is 7 bps higher than the 2Q2023 3M-SORA average of 3.62%.
Analysts from RHB Bank Singapore and PhillipCapital are mixed on all three Singapore banks, following the 2QFY2023 ended June earnings season. Analyst Glenn Thum from PhillipCapital has maintained his “overweight” rating, while RHB analysts have remained “neutral”, citing United Overseas Bank (UOB) as their sole buy with a target price of $31.70.
Thum says that he remains positive on banks, citing attractive dividend yields with upside surprises due to excess capital ratios and a push towards higher return on equity (ROE) as his key reason.
