DBS Bank's recent surge to an all-time high (ATH) of S$49.21 marks a technically significant moment — but one that may invite increased volatility and profit-taking, especially considering the macro and sector-specific pressures currently in play.
---
DBS: Where to next?
1. Elevated Valuation Risks
DBS trades at a higher P/B ratio than its regional peers, which raises concerns about sustainability unless earnings continue to justify the premium.
With a 16% YTD gain — relatively modest compared to its 52% rise in 2024 — the rally appears to be maturing, and momentum is slowing.
2. Margin Compression Headwinds
Management has warned of net interest margin (NIM) pressure, a trend likely to intensify if global central banks begin cutting rates.
Loan growth is also expected to moderate, given tighter credit conditions and macroeconomic uncertainty.
3. Technical Outlook
After setting new ATHs, stocks often undergo profit-taking, particularly if the breakout lacks strong volume or a macro catalyst.
A pullback to the S$47.50–48.00 support range would not be surprising and might even offer a healthier base for continuation toward S$50+.
If S$50 is reached in the near term, it may act as a psychological resistance level, triggering near-term consolidation.
---
Your Holding Period in Context
You asked, “How long have you held DBS?” — while I don’t have access to your portfolio records, if you’ve held DBS since early 2024 or longer, you are sitting on substantial gains. It might be wise to trim or hedge near ATH levels, particularly ahead of sector earnings that could reset expectations.
---
OCBC Earnings Preview (Next Week)
1. Relatively Defensive Profile
OCBC has a conservative lending book and often lags DBS in valuation metrics, making it less vulnerable to sharp corrections.
Its greater exposure to wealth management and insurance (Great Eastern) can provide a more diversified earnings stream.
2. Key Things to Watch:
NIM trends: Any sequential decline will likely be a market-moving datapoint.
Loan growth and provisions: Signs of asset quality deterioration or higher provisions will be taken negatively.
Fee income trajectory: Especially from wealth management, which had been soft in prior quarters.
Market Expectations:
Investors may favour OCBC as a safer rotation play if DBS appears overbought. However, a disappointment on margins or forward guidance could weigh on OCBC too.
---
Final Thoughts
DBS at ATH could face near-term resistance as valuation and macro risks come into sharper focus. A healthy pullback may be more likely than a continued melt-up without strong catalysts.
OCBC’s earnings will be a bellwether for sector sentiment. Positive results could temporarily support DBS and UOB as well, while weak numbers might validate profit-taking across the board.
If you are holding DBS for long-term dividends and capital growth, a small trim or use of options/stop-losses near these levels could offer some protection. Otherwise, watching for support retests post-earnings may offer better re-entry points.
Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.
