OCBC and UOB shares hit new highs, DBS trades below $59
Sign up now: Get ST's newsletters delivered to your inbox
Just weeks ago, UOB had been lagging behind its larger peers DBS and OCBC, which had rallied to record highs.
PHOTO: ST FILE
Follow topic:
- UOB shares surged to a record high of $39.14, up 4% from the previous day, as Macquarie Capital upgraded it to "outperform" with a $41 target.
- OCBC shares also hit a fresh high of $21.29, while DBS shares increased to $58.60, contributing to the Straits Times Index hitting a record 4,888.96.
- Macquarie expects UOB's provisions to normalise after large one-off provisions, assigning "underperform" to DBS and "outperform" to OCBC, anticipating lacklustre earnings growth in 2026.
AI generated
SINGAPORE - Shares of UOB surged past $39 for the first time on Jan 23, reaching a record high.
The stock closed at $39.50, up $1.88 or 5 per cent from Jan 22’s close of $37.62.
Just weeks ago, UOB had been lagging behind its larger peers DBS and OCBC, which had rallied to record highs.
OCBC shares, too, hit a fresh high on Jan 23. The stock broke past $21 to close at $21.29, 70 cents or 3.4 per cent higher than the previous day’s close of $20.59.
DBS shares closed at $58.65, up nearly 1 per cent from the previous day’s close of $58.08 but down from its last record closing price of $59.12 on Jan 16.
The banking heavyweights pushed the Straits Times Index to a record-breaking 4,895.15 before the benchmark index pared gains to close at 4,891.45, 1.31 per cent higher than its previous close of 4,828.32.
In a Jan 22 note, Macquarie Capital said headwinds facing UOB are expected to ease this earnings season, and it sees scope for the bank to catch up with its peers.
The firm upgraded UOB to “outperform” with a target price of $41, making it its top pick among the local banks, ahead of OCBC and DBS.
“After taking large one-off provisions in the third quarter, we expect UOB’s quarterly provisions to normalise,” Macquarie said.
While risks remain in Hong Kong’s commercial property market, UOB has set aside additional provisions, and recent interest rate moves should have supported the value of its collateral, the advisory firm said.
Meanwhile, the firm assigned an “underperform” rating for DBS at a target price of $50 and an “outperform” rating for OCBC at a target price of $21.50.
It noted that it is more upbeat on OCBC’s fee momentum but “sees the least room for DBS to surprise on the upside relative to expectations which are already at the optimistic end”.
While Macquarie expects net interest margin stability for the banks in the first quarter of 2026, it still sees lacklustre earnings growth in 2026 as a headwind.
DBS will kick off the banks’ earnings season with its full-year 2025 financial results due on Feb 9. UOB is scheduled to report on Feb 24, followed by OCBC on Feb 25.
