Dear readers, as Singapore prepares for the upcoming General Election on 3 May 2025, it is an opportune time to reflect on the performance of the nation’s financial sector, particularly the three largest local banking stocks: DBS Group Holdings, Oversea-Chinese Banking Corporation (OCBC), and United Overseas Bank (UOB). These banks have long been regarded as the backbone of Singapore’s stock market and economy. In this article, we will delve into their performance since the previous General Election held on 10 July 2020.
To understand the context of their performance, we should first consider the state of the Straits Times Index (STI), which serves as a barometer for the overall market sentiment. The last General Election took place amid the unprecedented challenges brought on by the Covid-19 pandemic. On 9 July 2020, just a day prior to the elections, the STI had plummeted to a concerning low of 2,652.65 points. This decline reflected investors’ anxiety regarding the economic ramifications of the pandemic, which had disrupted global markets and severely impacted local economies.
Fast forward to 14 April 2025, where the STI has shown a remarkable recovery, closing at 3,624.72 points. This represents an impressive increase of approximately 36.6% since the last election. This surge not only indicates a rebound in market confidence but also highlights the resilience of the Singaporean economy as it navigated through the challenging post-pandemic landscape.
Now, let’s take a closer look at the performance of the three banking stocks over this period. On 9 July 2020, the stock prices of the three banks were as follows:
DBS Group Holdings: $19.39
OCBC: $9.25
UOB: $21.00
As of 14 April 2025, the stock prices for these banks have experienced significant appreciation:
DBS: $39.96 (an increase of 106%)
OCBC: $15.57 (an increase of 68%)
UOB: $33.91 (an increase of 61%)
From these figures, it is evident that DBS has emerged as the standout performer among the trio, achieving a remarkable 106% increase in stock price since the last General Election. This growth can be attributed to several factors, including the bank’s strong fundamentals, effective management strategies, and its ability to adapt to changing market conditions. DBS has also successfully expanded its digital banking initiatives, which have proven invaluable during the pandemic, as more customers turned to online banking solutions.
OCBC, while not as explosive in its growth as DBS, still posted a commendable 68% increase in its stock price. The bank has also focused on enhancing its digital capabilities and improving customer experience, which has served it well in retaining and attracting customers during these challenging times. Furthermore, OCBC’s diversified portfolio and strong asset quality have helped it navigate through economic uncertainties.
UOB, with a 61% increase in its stock price, has also shown resilience. The bank has implemented various strategic initiatives to bolster its market presence and has maintained a robust balance sheet. UOB has particularly emphasized its focus on sustainable finance, aligning with global trends toward responsible banking practices.
In conclusion, as we approach the General Election in May 2025, the performance of DBS, OCBC, and UOB demonstrates the resilience and dynamism of Singapore’s banking sector. The impressive recovery of the STI and the growth of these banking stocks highlight the potential for continued economic growth and stability in Singapore. Investors will undoubtedly keep a close eye on these banking stocks as they consider their portfolios in the lead-up to the elections and beyond.