Dear readers, DBS stock is now trading at about $25 per share. I recently read an article on whether DBS stock would eventually reach $30 per share which did happen in Apr 2018. Since then, this $30 price level has been cited as a psychological level for DBS stock price.
While the article did not really answer the question on whether DBS stock price could reach $30 per share which is really a 20% upside from the current level, my view is that the question is not whether $30 is a possible level for DBS or not; but the more important question is whether growth is sustainable for DBS stock going forward.
I would find that generally the local landscape for DBS is going to get more competitive especially with the recent award by the Singapore government of four digital bank licences to Singtel-Grab entity, SEA, China’s Ant Group and a consortium comprising Greenland Financial Group. While it has been reported that DBS is unfazed by the emergence of the digital banks, investors must really recognise that the concept of banking has now changed in today’s landscape. The concept of an entire financial management framework is now the “in” thing, rather than the traditional concept of banking. Hence it it is not a surprise that Singapore has also recently announced its plans to build up capabilities in fintech and blockchain as a way for Singapore to deepen its role as a global hub.
Going forward, while it is laudable that DBS is continuously repositioning itself for today’s financial landscape, the very competitive, diversified and fragmented financial player landscape is likely in my view to pose a challenge to the local banking stocks in terms of growth.
The landscape of DBS is not the same as that many years before. I will prefer to invest my monies in some other stocks with great growth prospects and has undemanding valuations and there are still a number of them around. Just take a look at how key disruption in concept of business has translated to the stock prices of companies like SPH and Singpost!
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