The new records follow DBS&rsquo appointment by the Chinese central bank to be the first local bank to serve as a yuan clearing lender

 

[SINGAPORE] Shares of two local banks,   DBS   : D05 +0.36% and   OCBC   : O39 +0.78%, hit all-time highs on Tuesday (Dec 16), while   UOB   : U11 -0.03% trailed its peers.

 

Singapore&rsquo s largest lender, DBS, reached a new record of S$56 at 9.07 am, up 28.1 per cent year to date, with some 1.1 million shares changing hands. The bank was assigned a target price of S$70 by JPMorgan on Nov 28. Its shares closed 0.4 per cent or S$0.20 higher at S$55.49.

 

OCBC shares also rose to a fresh high of S$19.44 as at 11.52 am, up 16.5 per cent year to date, with some 1.9 million shares traded. A DBS Group Research report dated Dec 8 assigned it a target price of S$19.80. The counter closed at its record high of S$19.44, up 0.8 per cent or S$0.15 on the day.

 

Meanwhile, UOB traded as high as S$34.79 on Tuesday morning, though that price represented a fall of over 4 per cent year to date. DBS Group Research assigned the lender a target price of S$33.90. UOB ended the day slightly lower, down 0.03 per cent or S$0.01 at S$34.75. 

 

The new records follow DBS&rsquo appointment by the Chinese central bank to be the first local bank to serve as a yuan clearing lender on Monday.  

 

The records also come as the banking sector is projected to get strong tailwinds, driven by dividend yields of up to 6 per cent and excess capital, the DBS Group Research report indicated. 

 

Notably, the report forecast continued inflows into the banking sector for 2026, amid further deployment of the Equity Market Development Programme fund. 

 

&ldquo We expect cumulative inflows into Singapore, ongoing since 2024, to persist through 2026. Operating expenses control will likely be stringent to manage (forecasted) FY2026 net profit,&rdquo the report indicated. 

 

It added that robust wealth management inflows are &ldquo structurally here to stay&rdquo , due to Singapore&rsquo s status as a haven and the Singapore dollar&rsquo s defensive characteristics. 

 

Similarly, JPMorgan said that the local banks are set for &ldquo significant improvement in value creation&rdquo over a multi-year period and that DBS is expected to re-rate to a point where it is &ldquo unjustifiably expensive&rdquo . The investment bank also noted that OCBC shares are expected &ldquo to do well&rdquo as the lender raises payout ratios.  

 

Meanwhile, DBS Group Research adopted a &ldquo cautious&rdquo stance towards UOB, noting that &ldquo woes for (its) asset quality issues may not be over&rdquo , while JPMorgan projected that the stock would face volatility over the next six months. 

 

Q3 earnings

For the quarter ended September, DBS and UOB both beat expectations. DBS posted a 2 per cent year on year decline in net profit of S$2.95 billion due to the impact of global minimum tax, even though its total income reached a new high of S$5.93 billion.  

 

OCBC recorded steady net profit of S$1.98 billion, shored up by higher non-interest income and lower allowances, even as net interest income and net interest margin fell against a softening interest rate environment. 

 

For the period, UOB&rsquo s earnings plunged 72 per cent to S$443 million, missing the S$1.34 billion consensus estimate from a Bloomberg poll. The decline came as UOB&rsquo s allowance for credit and other losses rose to S$1.36 billion as at Sep 30, from S$304 million in the year-ago period. 

 

DBS Group Research is not deviating from its projection for the Straits Times Index (STI) to hit nearly 10,000 by 2040 in a report issued Dec 11.

 

In order for the STI to reach this presumably giddy height, analysts Yeo Kee Yan and Foo Fang Boon make the following assumptions &mdash continued improvement in investor sentiment, reforms to revive the Singapore equity market and a benign interest-rate environment.

 

In the more foreseeable year ahead, the investment theme for the STI in 2026 is &ldquo ride secular winners, seek SMC [small- and mid-cap] opportunities&rdquo , say the DBS analysts.

 

Following 2025&rsquo s stellar performance, they expect the STI to experience a &ldquo more moderate&rdquo gain of around 8% to reach 4,880 by end-2026. Despite global economic uncertainty and market volatility, they believe the Singapore market to remain resilient, underpinned by MAS equity market support measures such as the EQDP, the country' s &ldquo safe-haven&rdquo status and attractive dividend yields which are forecasted to reach 4.5% next year.

 

The report points out that with forecasted FY2026 EPS growth &ldquo accelerating&rdquo to 8.8%, the forecasted FY2026 price earnings growth of 1.5 times for the STI is now closer to the indices of similarly developed markets.

 

According to Yeo and Foo, local banks, Singtel, SGX, UOL and industrial heavyweights &mdash such as ST Engineering, Seatrium and SATS &mdash will support broad growth momentum in earnings for STI stocks.

 

These picks were chosen for near-term catalysts, and their ability to ride on Singapore&rsquo s longer-term economic growth, according to Yeo and Foo.

 

SMC top 10 picks

This year, much of the market vibrancy was driven by market boosting measures including a $5 billion fund to be given to fund managers to invest in stocks outside the STI, under what is called the Equity Market Development Programme, or EQDP.

 

Now, Yeo and Foo recognise the limits of the impact of the EQDP and remain selective for SMCs. For the new year, they are focusing on counters with potential for further re-rating through either value unlocking or earnings recovery as well as dividend stocks with sustainable income, which are likely to be integral to the strategies of EQDP asset managers.

 

Their top 10 SMC picks include Guocoland and Hotel Properties for potential value unlocking opportunities iFAST, Nam Cheong, SIA Engineering and UMS Integration for earnings growth or recovery potential and Centurion Accommodation REIT, NTT DC REIT, LendLease Global Commercial REIT and Netlink NBN Trust for sustainable income.

 

DBS Group Research is not deviating from its projection for the Straits Times Index (STI) to hit nearly 10,000 by 2040 in a report issued Dec 11.

 

In order for the STI to reach this presumably giddy height, analysts Yeo Kee Yan and Foo Fang Boon make the following assumptions &mdash continued improvement in investor sentiment, reforms to revive the Singapore equity market and a benign interest-rate environment.

 

In the more foreseeable year ahead, the investment theme for the STI in 2026 is &ldquo ride secular winners, seek SMC [small- and mid-cap] opportunities&rdquo , say the DBS analysts.

 

Following 2025&rsquo s stellar performance, they expect the STI to experience a &ldquo more moderate&rdquo gain of around 8% to reach 4,880 by end-2026. Despite global economic uncertainty and market volatility, they believe the Singapore market to remain resilient, underpinned by MAS equity market support measures such as the EQDP, the country' s &ldquo safe-haven&rdquo status and attractive dividend yields which are forecasted to reach 4.5% next year.

 

The report points out that with forecasted FY2026 EPS growth &ldquo accelerating&rdquo to 8.8%, the forecasted FY2026 price earnings growth of 1.5 times for the STI is now closer to the indices of similarly developed markets.

 

According to Yeo and Foo, local banks, Singtel, SGX, UOL and industrial heavyweights &mdash such as ST Engineering, Seatrium and SATS &mdash will support broad growth momentum in earnings for STI stocks.

 

These picks were chosen for near-term catalysts, and their ability to ride on Singapore&rsquo s longer-term economic growth, according to Yeo and Foo.

 

SMC top 10 picks

This year, much of the market vibrancy was driven by market boosting measures including a $5 billion fund to be given to fund managers to invest in stocks outside the STI, under what is called the Equity Market Development Programme, or EQDP.

 

Now, Yeo and Foo recognise the limits of the impact of the EQDP and remain selective for SMCs. For the new year, they are focusing on counters with potential for further re-rating through either value unlocking or earnings recovery as well as dividend stocks with sustainable income, which are likely to be integral to the strategies of EQDP asset managers.

 

Their top 10 SMC picks include Guocoland and Hotel Properties for potential value unlocking opportunities iFAST, Nam Cheong, SIA Engineering and UMS Integration for earnings growth or recovery potential and Centurion Accommodation REIT, NTT DC REIT, LendLease Global Commercial REIT and Netlink NBN Trust for sustainable income.

 

DBS Group Research is not deviating from its projection for the Straits Times Index (STI) to hit nearly 10,000 by 2040 in a report issued Dec 11.

 

In order for the STI to reach this presumably giddy height, analysts Yeo Kee Yan and Foo Fang Boon make the following assumptions &mdash continued improvement in investor sentiment, reforms to revive the Singapore equity market and a benign interest-rate environment.

 

In the more foreseeable year ahead, the investment theme for the STI in 2026 is &ldquo ride secular winners, seek SMC [small- and mid-cap] opportunities&rdquo , say the DBS analysts.

 

Following 2025&rsquo s stellar performance, they expect the STI to experience a &ldquo more moderate&rdquo gain of around 8% to reach 4,880 by end-2026. Despite global economic uncertainty and market volatility, they believe the Singapore market to remain resilient, underpinned by MAS equity market support measures such as the EQDP, the country' s &ldquo safe-haven&rdquo status and attractive dividend yields which are forecasted to reach 4.5% next year.

 

The report points out that with forecasted FY2026 EPS growth &ldquo accelerating&rdquo to 8.8%, the forecasted FY2026 price earnings growth of 1.5 times for the STI is now closer to the indices of similarly developed markets.

 

According to Yeo and Foo, local banks, Singtel, SGX, UOL and industrial heavyweights &mdash such as ST Engineering, Seatrium and SATS &mdash will support broad growth momentum in earnings for STI stocks.

 

These picks were chosen for near-term catalysts, and their ability to ride on Singapore&rsquo s longer-term economic growth, according to Yeo and Foo.

 

SMC top 10 picks

This year, much of the market vibrancy was driven by market boosting measures including a $5 billion fund to be given to fund managers to invest in stocks outside the STI, under what is called the Equity Market Development Programme, or EQDP.

 

Now, Yeo and Foo recognise the limits of the impact of the EQDP and remain selective for SMCs. For the new year, they are focusing on counters with potential for further re-rating through either value unlocking or earnings recovery as well as dividend stocks with sustainable income, which are likely to be integral to the strategies of EQDP asset managers.

 

Their top 10 SMC picks include Guocoland and Hotel Properties for potential value unlocking opportunities iFAST, Nam Cheong, SIA Engineering and UMS Integration for earnings growth or recovery potential and Centurion Accommodation REIT, NTT DC REIT, LendLease Global Commercial REIT and Netlink NBN Trust for sustainable income.