DBS surges to record high of $52.87, lifts STI past 4,340 for the first time
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DBS is seen as a proxy for safe haven flows to Singapore, amid geopolitical turmoil in the region this week, said Maybank’s head of equity research Thilan Wickramasinghe.
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SINGAPORE – DBS shares hit an all-time high on Sept 10, lifting the Straits Times Index (STI) to a fresh record above 4,340 points.
Singapore’s largest bank touched a peak of $52.87 during the day, before closing at $52.73, up 3.64 per cent from the previous day’s close of $50.88. The STI rose 1.1 per cent, closing at 4,346.46 points.
Maybank’s head of equity research, Mr Thilan Wickramasinghe, suggested that the correlation between DBS’ and STI’s performance might be attributed to the perception of the bank as a proxy for safe haven flows into Singapore.
“With a number of geopolitical flashes in the Middle East and regionally this week, there is likely some flight to safety and quality.”
He added that DBS’ dividend yield is highly visible until 2027, and with expectations of further interest rate cuts from the US Federal Reserve in September, the bank is an attractive proposition for investors.
JP Morgan had upgraded the bank to “overweight” on Sept 9 with a target price of $56, citing its “sector-high” dividend yield spread as the reason for its re-rating.
It had previously downgraded the bank in May to “neutral” with a target price of $47, due to limited share upside forecast, as well as net interest margin compression hitting the banks at that time.
At least four analysts had also upgraded their target prices on DBS since August, with Goldman Sachs valuing the stock at $57.20 the highest on the street.
DBS shares have been rising steadily after it announced in August a solid results showing for the second quarter ended June 30, when the bank saw a 1 per cent increase in net profit of $2.82 billion, up from $2.8 billion in the year-ago period.
The bank also declared an interim dividend of 60 cents and a capital return dividend of 15 cents per share, bringing its total payout to about $2.13 billion.
DBS chief executive Tan Su Shan said at a results briefing that the bank was able to offset lower interest rates and tariff headwinds with strong balance sheet management and deposit growth.
Singapore’s two other banks closed flat for the day. OCBC stood at $16.85 at the close, while UOB ended at $35.48. The three banks collectively account for over half the STI, which crossed the 4,000-point mark in July.
The index has also been lifted by renewed investor confidence, with US tariff rates on Singapore among the lowest in the world at 10 per cent.
The market is also expecting further updates from the Monetary Authority of Singapore (MAS) on its Equity Market Development Programme, which aims to enhance market liquidity and support Singapore’s fund management ecosystem.
In July, MAS announced that $1.1 billion of the $5 billion under the scheme would be allocated to three fund managers:
