Dear readers, recently I posted an article about the comparison of the three biggest banking stocks here in Singapore: DBS stock, OCBC stock and UOB stock. In the above article, I showed how based on a normalized dividend yield basis, OCBC stock stood out for me.
In this post, I am going to share another exciting insight about the three banking stocks that should be of interest to you. Are you ready? Without further ado, let us deep-dive into the topic.
The Singapore Straits Times Index, benchmark of the Singapore stocks is now at around 2,600. At this level, the Singapore stocks have ceded their gains over the past four years. Singapore stocks markets have returned to January 2016 where the Straits Times Index was also around 2,600.
Now the exciting insight.
In January 2016, DBS stock traded at around $13.80. Yesterday (on the backdrop of similar Straits Times Index level), the stock traded at $20 (before XD) or 44.9% more than the 2016 level.
In January 2016, OCBC stock traded at around $7.80. Yesterday (on the backdrop of similar Straits Times Index level), the stock traded at $8.87 or 13.7% more than the 2016 level.
In January 2016, UOB stock traded at around $17.10. Yesterday (on the backdrop of similar Straits Times Index level), the stock traded at $19.88 or 16.3% more than the 2016 level.
So, based on the above, I would view DBS stock as expensive at its current price. On the other hand, I would think OCBC stock and UOB stock seems to be more appropriately priced given their historical performance at similar Straits Times Index level in 2016. I continue to favour OCBC stock more since its current price seems to be the most “right-sized” among the three banking stocks given the current Straits Times Index level.
There is also one important point I would wish to make. DBS stock price seems to be still doing very well given that the price is still 44.9% higher than its 2016 price. DBS good stock price seems to be one of the factors holding up current the Straits Times Index level. If DBS stock today is to correct to close to its 2016 level, I believe the Straits Times Index will be lower than the current 2,600 level.
As I have shared many times, my target support for the Straits Times Index is 2,000 in the near-term.
That’s it for my insights today. I Thank you once again for your support of SG STOCKS INVESTING, your Money and Lifestyle magazine! Connect with me here to follow the daily exciting and useful posts on these two blogs, Thank You for your support!
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