“With strong price performance year-to-date (ytd), we are quite cautious as P/B multiples are at multi year highs and thus are at risk of de-rating as the prospect of eventual lower rates come into view,” they write.
HSBC Research analysts Weldon Sng and Yash Taparia have kept their “hold” calls on all three Singapore banks, DBS Group Holdings, Oversea-Chinese Banking Corporation (OCBC) and United Overseas Bank (SGX:U11
) (UOB) due to valuations.
As at their report dated Oct 22, DBS has an estimated FY2024 P/B of 1.8 times. OCBC’s estimated FY2024 P/B is 1.2 times while UOB’s estimated FY2024 P/B is also at 1.2 times. These are based on their share prices of $39.70 for DBS; $15.40 for OCBC; and $32.60 for UOB. The analysts have also estimated the banks’ FY2024 yields to be at 5.6%, 5.7% and 5.6% for DBS, OCBC and UOB respectively.
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