Money Talk: DBS, OCBC and UOB; Swiber Holdings

SINGAPORE - Stay up to date on market chatter with our picks of the latest broker research reports, compiled by The Straits Times Money Desk.

1. DBS, OCBC and UOB

Broker: OSK-DMG

Pro-democracy protests in Hong Kong have caused DBS to suspend services at four branches while two of OCBC's branches were also affected.

DBS has a total of 50 branches in Hong Kong, with 12 branches located on Hong Kong island. OCBC Wing Hang has 67 branches in Hong Kong while UOB has two branches located in Central.

While it is premature for any cut in earnings, a standstill in the protests would dampen sentiment on Singapore bank stocks. Both DBS and OCBC have sizeable branch networks in Hong Kong while their profit contributions from Greater China are at 31 per cent and 23.5 per cent, respectively.

Maintain Buy on DBS with a target price of S21.00 and Neutral for OCBC and UOB with target prices of $10.55 and $26.00 respectively.

2. Swiber Holdings

Broker: OCBC

It is too early to turn bullish on Swiber. Since our previous report on 14 Aug, its share price has dropped 13 per cent compared to the STI's flattish performance.

We believe that this could be related to its relatively slow new order flow, as well as the recent slide in oil prices. There has also been news of Indonesia's Pertamina cancelling its West Madura tender, in which Swiber was a contender.

Against the current backdrop, we believe players with high overheads and operating on thin margins like Swiber are more susceptible to any downturn in sentiment. Looking ahead, its upcoming third quarter results may continue to be lacklustre.

Maintain Hold with a lower fair value estimate of $0.49 from $0.57.

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