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Octavia ( Date: 28-Nov-2013 09:17) Posted:
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CLSA reckons 3Q13 results are likely underwhelming. NIMs are expected to be stable but slower loan growth, subdued non-interest income and bad debts are expected to weigh on the bottom line. OCBC?s headline numbers will look particularly weak on a y/y basis given the material gain in 3Q12. CS? order of preference is: UOB, OCBC, DBS.
UOB (5th Nov) ? forecast 3Q13 NPAT of $634m (-3% y/y, - 13% q/q) on the back of exceptional gains in both 3Q12 and 2Q13. There will be gains in 3Q13. However, these are expected to be lower than previous periods. Recommendation: Buy, TP: $24.20
OCBC (1st Nov) ? forecast 3Q13 NPAT of $655m (-65% y/y, +4% q/q) as 2Q13 was particularly weak, while there was a $1.1bn gain in 3Q12. On an underlying basis, 3Q is expected to be down 10% y/y on subdued non-interest income and higher bad debts. Recommendation: Outperform, TP: $11.30
DBS (1st Nov) ? forecast 3Q13 NPAT of $847m (-1% y/y, -4% q/q) on slower loan growth momentum, smaller fees & commissions and lower trading income. 2Q13 was an exceptionally strong quarter for non-interest income. Recommendation: Underperform, TP: $18.5
UOB in consolidation mode. Nothing to trade at the moment.
http://mystocksinvesting.com/singapore-stocks/uob-bank/uob-bank-trading-in-a-symmetrical-triangle/
Huge dumping in the last minute...dropped more than 60c in the last minute...
any idea why?
marubozu1688 ( Date: 29-Aug-2013 21:08) Posted:
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Nice chart to trade for UOB Bank on either direction!
http://mystocksinvesting.com/singapore-stocks/uob-bank/uob-double-tops/
Here's what boosted Singapore's impressive GDP in 2Q
'Modest improvements' seen in other segments.
According to Bank of America Merrill Lynch, Singapore's GDP growth came in at +3.8% in 2Q, above expectations and earlier flash estimate of +3.7%. Higher reading came from stronger services (+5.5% vs. +5% flash estimate), despite softer manufacturing (+0.2% vs. +1.1% flash) and construction (+5.1% vs. +5.6% flash). On a quarter-on-quarter seasonally adjusted annualized basis, GDP expanded a sharp +15.5% from the first quarter.
Growth was led by services, in particular financial services (+13.1% in 2Q vs. +10.6% in 1Q), wholesale & retail services (+5.6% vs. +0.2% in 1Q). A sharp
turnaround was seen in transport & storage (+2.5% vs. -0.9% in 1Q).
Other services components also showed modest improvements, including business services (+3.7%), info-com (+3.5%), hotels & restaurants (+3.2%) and ?other services? (+1.7%). Visitor arrivals remained healthy, supporting the tourismrelated segments.
SOURCE: YAHOO FINANCE
LINK: http://sg.finance.yahoo.com/news/heres-boosted-singapores-impressive-gdp-062800701.html
SGD 2.56 Per 1 Preference share is for the period from 15 March 2013 to 15 September 2013 (both dates inclusive) calculated as follows: S$100 x 5.05% x 185/365. The preference shares will be redeemed on Monday, 16 September 2013.
Record date : 05/09/2013
UOB earned S$783 million in the three months ended June, up from S$713 million a year earlier. The results beat the S$676 million average estimate of six analysts polled by Reuters.
The results came after DBS Group Holdings Ltd, Southeast Asia's biggest lender, beat expectations with a 10 per cent rise in quarterly profit, boosted by strong growth in loans and higher fees. Oversea-Chinese Banking Corporation Ltd reports results on Friday. - Reuters
Why OCBC is a better choice.
Not long ago, analysts claimed that DBS would be a better choice of investment than OCBC and UOB. Reasons given were:
A1) Singapore Government's cooling measure housing market would hurt the local banks. Since DBS is diversified across Asia, it would be less exposed to the impact of the cooling measure than banks (OCBC & UOB) who are mostly based in Singapore.
A2) DBS investment outside Singapore, gives it better growth opportunity.
A3) High amount of housing loans hold by Singapore Banks risk turning into large amount of Non Performing Loan when interest rate hike inevitably- claimed by Moody.
In my opinion, the above points are not the full story and a decision based upon those might be distorted. Allow me to share the reason why pure local banks are better selections.
1) Cooling Measure VS Economic Crisis
The worry about more property cooling measure to come, is a needless one. After some 7 rounds of cooling measure, property price and transaction volume are beginning to fall. Since the government policies has taken effect and reach its aim of cooling the market, it makes no sense to continue hammering the market with new measures. In fact we can expect government to start removing those measure as soon as interest rate starts moving up- most probably after 1 year. Removing those cooling measure is necessary to increase the liquidity of housing market and allow those investors cannot afford the high interest rate to sell their properties. The next question that comes naturally would be: Why would government want to help those investors who can't afford high interest rate? Well, those investors pledged their properties when apply for housing loan. If they can't afford the rising interest rate their properties and can't sell their properties, their properties would be seized and sell in the market. When such cases happened to large amount of investors, we can quickly see the market flooded with worthless properties while banks see many loan turn bad and collateral turn worthless- a repeat of US 2008 subprime crisis. As a small country, the economic resulting hardship would be unbearable. Thus government would its best to prevent such crisis and a necessary step would be to increase the liquidity of the property market once interest rate starts hiking.
In constrast, the risk of economic disruption as a result of fund exiting Asia would prove to be more worrying. This is especially true for developing countries like Vietnam, Indonesia, and India- check out news about India struggle to hike interest rate in order to fight currency devaluation. If not handled properly, the history of 1997 currency crisis would repeat itself and companies in the those countries would simply go bust. In all these developing Asian countries, DBS has stake in them and thus it run a high risk of suffering a huge loss should anything happened to these countries. Thanks to the smart polices by MAS, Singapore is expected to weather such economic disruption and thus" pure" Singapore banks are expected to be spared from the crisis. Strong policies that MAS have imposed to protect the economy include appreciation of SGD to its all time high and agreeing to accept Japanese bonds as collateral.
2) The Real Opportunity To Growth
Growth opportunites offered in other Asian countries are truly debatable. In the bid to protect their economy, most countries have imposed strong protectionism policies on their fianacial industries. These protectionsim policies limit the growth and competitiveness of foreign banks. A good example can be seen from the recent case where Temasek Holding faced tons of hurdles when it tried to sell shares of Indonesia's Danamon Bank to DBS. What is a growth opportunity when you can't even cash out?
On the other hand, Singapore as a financial hub for South East Asia and with its strong economic stability offer much more attractive growth opportunity for the local banks. Foregin business preferred to set up in Singapore and foreign funds flow first into Singapore then to the rest of SEA countries.We can safely assume this will continue to be the case for at least the next 5-10 years. Thus banks who focus more on local market are expected to grow better than bank who seek growth in other SEA countries.
3) MAS's ACE Card
As always Moody tends to exaggerate " crisis" that is unlikely to happen and comfort you when there is real crisis lurking (2008 subprime is a good example). Crisis as a result of high amount of housing debt is UNLIKELY to happen in Singapore. As mentioned above, the cooling measure can be removed to improve liquidity in the market, this provides opportunity for those who cannot afford the rising interest rate to exit the market. Secondly, government's plan on increasing the population by 2020 should also provide ample demand to balance the supply in propety market. Most importantly, MAS has an ACE card up its sleeve that will allow it to buy some time before rising the local interest rate- inevitably Singapore interest rate is highly pegged to US interest rate, which is expected to rise when Fed stops it QE by mid 2014. Remember the " All time high SGD" we are talking about? The high SGD gives MAS more flexibility and room in choosing to devaluate SGD over increasing interest rate. This delay the need to rise local interest rate, and should give sufficient time for property investors to be warned of the rising rate and to liquidate their properties. Thus the crisis warned by Moody is high avoidable and should not be of major concern.
In a nutshell, with the low economic risk and high growth opportunity, Singapore financial market is a much better investment than many SEA market. With this I concluded that banks that focus on local markets (OCBC & UOB) will fare much better than bank (DBS) that is diversified across the volatile Asia markets. As for why OCBC is preferred over UOB, it is because size does matter.
Just sharing my view here, email me rosesyrup123@yahoo.com if you have something to share with me. Thanks.
The above analysis is purely my personal opinion. I urge you to do your own assessment and calculation for any relevant decision making purposes.
Author: Rosesyrup
03 May 2013 10:19 GMT
The fabrication group said net profits were offset by a 64% drop in associate contributions from Cosco Shipyard Group to $4.2 million, as well as the absence of a year-ago benefit from interest income on deferred payment to customers.
The contractor raised revenues 11% over the three-month period to $1.1 billion, which it put down to higher revenue recognition in the rig building segment.
Sembmarine booked $1.7 billion in rig orders and offshore platform contracts since the start of the year to take its order book to $13.6 billion.
The contractor said overall outlook was “healthy”, while warning that “competition is intense and impacts margins”.
It said it expects strong demand for rig building, especially high-spec units in an era of increased focus on safety.
Why UOB's stellar 1Q performance may unfortunately be a one-off event
Earnings projection down to S$2885m.
According to OCBC Investment Research, the outlook for NIM is still mixed and likely to hover at current level. Overall, we expect its FY13 performance to be supported by higher fee income, with growth rate for Non Interest Income doubling that of Net Interest Income. OCBC does not expect a repeat of the strong 1Q13 Fee Income for the remaining three quarters of the year.
OCBC noted that taking these into consideration, it made very slight adjustments to its FY13 earnings projection, dropping it from S$2900m to S$2885m.
Here's more:
In line with the other two banks, UOB Group posted 1Q13 net earnings which also exceeded street expectations. 1Q net earnings of S$722m were up 5% YoY and 4% QoQ and ahead of consensus of S$688m based on Bloomberg poll.
While Net Interest Income fell 4% YoY and flat QoQ to S$964m, its overall performance was buoyed by higher Non-Interest Income, which rose 12% YoY and 13% QoQ to S$708m. Together with lower operating expenses, this gave its operating profit a boost to S$976m. Net Interest Margin (NIM) fell from 1.98% in 1Q12 and 1.76% in 4Q12 to 1.70% in 1Q13.
Loans grew a healthy 7.4% from last quarter to S$167b. Impairment charge fell QoQ from S$150m to S$130m.
The key highlight was the strong 17% QoQ or 25% YoY increase in Fee and Commission Income to S$453m in 1Q13. On a QoQ basis, several units enjoyed strong double-digit growth. This included loans (+63%), fund management (+19%) and Investment (+18%).
UOB:
Announced 1Q13 results which were above estimates, fueled largely by stronger contributions from non-interest income. Overall net profit at $722m, +5% y/y and +4% q/q, while total income at $1.67b, +3% y/y and +5% q/q. Net Interest income at $964m (-4% y/y , -0.3% q/q) was weighed by net interest margins (NIMs) which declined to 1.70% versus 1.76% q/q, although customers loans grew to $164.3b (+13% y/y , +8% q/q) resulting in UOB’s loan / deposit ratio rising to 87% (86% y/y , 84% q/q). The group saw better asset quality as non-performing loans (NPL) ratio improved further at 1.3% versus 1.4% y/y A stronger non-interest income helped in offsetting the muted performance in net interest income, at $708m, +12% y/y and +13% q/q, driven largely by the sterling performance in fee income, underpinned by strong growth in lending, fund management, capital market and wealth management businesses.Trading and investment income however decreased on back of lower gains on sale of securities. Going forward, UOB expects overall growth to be moderate this year, and expects to see ample liquidity and intense competition.
Overall, the bank remains well capitalized with Tier 1 ratio at 14.3% and total Car at 18%.
At current price, UOB trades at 1.44x P/B versus DBS’s 1.31 and OCBC’s 1.44x.
Ratings as follows:
Nomura maintains Buy with $22.60 TP
CIMB maintains Neutral with $21.24 TP
Mizuho securities maintains Neutral with $23.00 TP
HSBC downgrades to U/w with $21.60 TP
UNITED Overseas Bank said first quarter 2013 net profit was up 4.9 per cent to $722 million on higher fee income and strong loan growth, offset by lower margins.
Against the fourth quarter of last year, net profit was up 3.8 per cent.
Net interest income of $964 million was 3.5 per cent lower on year due to compressed assets yields, UOB said.
Loans grew 13.3 per cent to $167 billion as at March 31 2013 from a year ago.
chinastar ( Date: 01-Mar-2013 06:38) Posted:
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marubozu1688 ( Date: 23-Mar-2013 17:37) Posted:
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