Koh expects yields to remain firm as the US anticipates rapid economic recovery driven by optimism over Covid-19 vaccinations and stimulus spending, including the US$1.9 trillion ($2.56 trillion) American Rescue Plan that was recently signed off. US GDP is projected to expand by 5.5% in 2021 and 3.8% in 2022, while the job market bounced back with 379,000 jobs created in February.
UOB Kay Hian Research has maintained its ‘overweight’ rating for the Singapore banking sector on the back of higher bond yields, economic recovery following the Covid-19 vaccine rollout, moderation in credit costs, and better dividends.
UOB Kay Hian analyst Jonathan Koh notes that Singapore government bond yields have surged in tandem with US bond yields, with the yield for 10-year Singapore government bonds up by 71 basis points year-to-date to 1.55%.
