DBS

Analysts warn of Singapore experiencing “one of the strongest contractions in the region” due to its open and trade-driven economy

The currency’s rally since this year’s nadir in late May has made it one of the best performers in Asia, with the buying momentum still standing close to the strongest since January.

Singapore’s banks are still experiencing broad-based business contraction, says CGS-CIMB, and while credit growth may pick up as GDP recovers, the end of moratoriums could deepen asset quality pressures.

A month has passed with Singapore’s bank lending rate declining as both business and consumer loans took a hit.

“Fears of a worst-case scenario seem to have overshot lockdown reality, with less earnings misses and higher earnings per share (EPS) upgrades in 2Q20. Progressive ramp up of regional economic activity in 2H20 has potential to strengthen these trends."

The Covid-19 pandemic and the retreat of globalisation have widened the financial fortunes between developed and emerging economies. Does it mean the end of an era of supercharged catch-up growth for EMs?

Shareholders of DBS, UOB and OCBC will, unfortunately, have to make do with no more than $0.72, $0.78 and $0.318 per share respectively, lowering yields between 3-4%.

24-month returns see the Democrats yielding a significant 25.9% average while the Republicans yield only 6.4%.

This tie-up with AWS is part of DBS’ on-going digital transformation efforts.

Singapore banks can expect lower net interest margins (NIMs) ahead though credit costs could ease in 2H2020. The reports come after the three local banks posted broad-based net profit declines for 1H20 last week.