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DBS

DBS to Gain as Funds Rain in SingaporeDBS is positioned uniquely at the intersection of both India and China to gain from growth in both countries. Facilitating capital flows out of China, continued rising footprint in India, digital asset presence, a trusted bank in Singapore which is emerging as the Swiss of Asia, DBS has more than one source of tailwind powering its upward flight. Specifically, this paper identifies five key drivers powering DBS shares. Against the backdrop of sharp recession ahead, this paper posits a case study delivering 2.8x reward to risk ratio through a spread comprising of long DBS shares and short MSCI Singapore Index futures to gain from expected outperformance. The DBS Story Launched >50 years ago, DBS is the largest bank in South-East Asia and rubbing shoulders among global banks with S$743B in assets as of December 2022. Its diverse services cover consumer banking, asset management, brokerage, and digital assets. DBS' robust capital position, strong governance, and solid operational practices, with MAS as the regulator, makes it a bank with the highest credit ratings in APAC. “Live More, Bank Less” defines the essence of the bank's strategy. DBS aspiration goes beyond being the best bank but aspires to deliver experience that's world class and on par with GANDALF firms. GANDALF stands for Google, Amazon, Netflix, Apple, LinkedIn, and Facebook. And D? DBS, of course. A key figure in the transformation has been its CEO Piyush Gupta who has helmed its leadership since 2009 and is seen as instrumental in the bank's meteoric rise as a global banking player. Last year, DBS delivered stunning record profits of S$8.2B driven by surging rates. 2022 was not entirely hunky dory as fees and commissions declined 12% YoY. DBS expects 2023 to be better with a forecast of double-digit fee income growth plus rising income from cards business. While loan growth slowed with rising rates, DBS continued to gain market share across both corporate and consumer loans. Key growth driver for DBS in 2023 and for the rest of the decade is the wealth migration from China. Singapore is a key destination for capital taking flight out of China. DBS is strongly positioned to take advantage of this as a trusted and customer-focused banking partner. Five factors to propel DBS shares ahead: 1. Chinese Wealth Migration Ultra rich Chinese have been emigrating with Singapore as the preferred destination. China’s crackdown on its business and entrepreneur class with a focus on “common prosperity”. China faced capital flight of about $150B annually from its citizens migrating. Capital flight in 2023 is expected to be far higher, with some estimates suggesting it could top $100-$200B. About 10,800 rich Chinese migrated in 2022, the highest since 2019, according to Henley & Partners. China has the world’s second-largest number of ultra-rich with more than 32,000 people holding wealth more than $50M. DBS holds a key position to capitalize on this trend as the leading and trusted bank in Singapore. It is not just the Chinese but also the wealthy from India, Indonesia and Thailand finding Singapore as a convenient home for them and their wealth. 2. Regional Expansion via Digital First Strategy DBS’s digitization dovetails nicely into their regional expansion as digitised infrastructure easily transcends geography. Case in point is DBS' expansion into India. It had its presence in India since 1994. However, it was with the launch of Digibank India in 2016 that propelled its footprint in the country. Digibank India was the first mobile-only, paperless, signatureless, and branchless bank in India. This allowed them to expand rapidly in the country while India was going through its own financial digitization following demonetization exercise in 2016. This provided DBS with a strong launchpad while keeping operational costs at bay. DBS India has seen its deposits grow consistently since launch with a huge jump following the acquisition of Laxmi Vilas Bank (LVB). Over the past 3 years, DBS India has doubled its revenue. DBS has been profitable since launch, except for a tiny loss in 2017-18. LVB acquisition enabled DBS to expand its branch presence nearly 18x from mere 30 to >500. 3. Bold Forays into Digital Assets In 2020, DBS launched DBS Digital Exchange (DDEx) enabling institutional and accredited investors to access digital assets. With rising regulations for crypto firms, a fully regulated digital exchange like DDEx from a trusted bank such as DBS is a safe haven for digital asset investors. Success of DDEx is evident in its performance in 2022 when BTC trading on the exchange increased 80% YoY. BTC’s custodied on the exchange also doubled while ETH custodied on the exchange increased 60%. DDEx also doubled its customer base to nearly 1,200 last year. 4. Deep Digitisation CEO inspired DBS' purpose driven digital adoption agenda in 2014, with a five-year roadmap and a lofty aim of being named the best bank in the world. DBS approached the challenge by thinking and operating like a major tech firm instead of a bank. It overhauled its internal tech, 90% of which was developed and managed in-house making it cloud-native enabling rapid scaling and easy deployment. DBS pioneered “Digibank,” a mobile only bank that allowed it to scale rapidly and with low cost per retail customer. Digital customers have two times higher income per client compared to traditional clients with cost to income ratio of 34% relative to 54% for traditional clients. 5. Startup Mentality Making Banking Joyful. DBS is deliberate in becoming ever more customer-centric by cleverly tailoring each customer journey to be hassle-free and enjoyable. The bank aims to become “invisible” to its customer while meeting their banking, financial, and investing needs. In instilling a start-up culture, the leadership team continues to cultivate agility, continuous learning, customer obsession, data-driven experimentation and risk-taking across the organisation. DBS Outperforms other Singapore Banks Among top three Singapore Banks: • DBS has the highest ROE at 14.95%. • DBS operating margins of 41.5% are far higher than others. • DBS margins are twice those of OCBC. • DBS grew its Free Cash Flow at 76.5% YoY, far higher than others. • DBS has the lowest P/E ratio making the stock relatively undervalued. • DBS ROIC of 8.2% is marginally lower than OCBC’s 8.75% • DBS asset growth of 8.3% YoY in 2022, lower than UOB’s 9.8%. This puts DBS in a far better financial position than the other Singapore banks. The better performance is also highlighted by DBS stock’s price action. Since Piyush Gupta took over as CEO in 2009, DBS has outperformed OCBC and UOB by an outsized margin and the stock stands nearly 300% higher in the period. Similarly, since the start of 2020, DBS is up 29% and has outperformed the other two banks vindicating its strategy and execution. Comparative Analysis with Other Global Banks DBS shines bright among the global banking majors too as evident below. • DBS has the highest Return on Equity at 15% • DBS has the highest Return on Invested Capital at 8.2% • DBS price to earnings is 6.85 only higher than BNP & Barclays DBS strong operational efficiency stands out even among the top global bank. Additionally, DBS reported 8.3% annual asset growth in 2022, compared to US banks which have had moderate asset growth or decline. Since 2009, DBS stock has far outperformed other major global banks and stands second only to JP Morgan. Notably, DBS has also outperformed the KBW Bank ETF which tracks the performance of US Banks signalling that DBS has been providing stronger growth than the average growth of the US banking industry, particularly during the high-inflation environment of 2022. The trend is even more apparent when looking at the performance of these stocks since the start of 2020. Among the selected banks, DBS is the only bank that has shown strong gains during the pandemic and stands ~30% higher. Other banks have either posted modest gains or losses. In addition to providing strong growth, which is reflected in DBS stock’s price action, DBS also has a strong commitment to returning value to shareholders which can be seen from their nearly 4.1% dividend yield. DBS annual dividend yield has grown by about 100 bps since 2020. Its dividend in 2022 of S$1.5/share exceeded pre-pandemic levels. DBS also announced a special S$0.5/share dividend last quarter reflecting improved earnings profile and strong capital position. 2023 Growth Outlook Analysts expect DBS to continue its meteoric rise, with an average forecast of 15% growth in 2023. Some analysts expect DBS to be 31% higher while even the lowest forecasts are for -11% decline. Key drivers for this growth are expected to be: • Lean operational strategy and structure leading to lower operational costs. • Capital outflows from China. • Regional expansion strategy using their digital banking template. DBS stock has rallied 86% since March 2020, compared to the Straits Times Index which is only 36% higher in the same period. DBS is the largest constituent of the STI and a major driver of growth for Singapore stocks. Overall, DBS bucked the overall trend in the banking sector and provided growth in an immensely challenging environment by focusing on sustainable growth and lower costs. What about the banking crisis? Investing in bank stocks when uncertainty in the sector is so high can be daunting. The collapse of SVB, shuttering of Signature, and acquisition of Credit Suisse has incited turmoil in markets despite central banks stepping in to ease liquidity concerns and avoid contagion. Amid the crisis there has been discussion of loose regulatory practices and risky bets. However, in Singapore, MAS keeps a tight check on the risk management of banks in the country. According to Moody’s, DBS bank still has the highest tier credit ratings and none of its holding are currently under watch. Such stellar ratings suggest that DBS has extremely strong capacity to meet its financial commitments, making it unlikely to be affected by any remaining contagion in the sector. MAS’s strict stewardship of Singapore banks was underscored by a recent outage in DBS digital services. Though the services were promptly restored on the same day, MAS ordered a thorough investigation into the outage. The outage also affected DBS stock price, driving it 1.5% lower but the stock quickly recovered. Both highlight the resilience in the regulatory, operational, and governance practices at DBS. Trade Setup In times of elevated stress, stock betas can spike causing share prices to tank on macroeconomic shocks. To harness pure alpha, this paper posits a spread with long DBS and short MSCI Singapore Index futures. The spread trade ensures that the position remains hedged against a broader market downturn. DBS has outperformed MSCI Singapore index consistently over the past 10 years. MSCI Futures on SGX (SGP1!) give exposure to S$100 x index price which translates into a notional value of S$30,905. On SGX, lot sizes for individual stocks are 100 which means that in order to balance the notional on both legs, 9 lots of DBS shares are required which translates into a notional value of S$30,042. Entry: 10.8% Target Level: 12.5% Stop Level: 10.2% Profit at Target: S$ 4,726 Loss at Stop: S$ 1,671 DISCLAIMER This case study is for educational purposes only and does not constitute investment recommendations or advice. Nor are they used to promote any specific products, or services. Trading or investment ideas cited here are for illustration only, as an integral part of a case study to demonstrate the fundamental concepts in risk management or trading under the market scenarios being discussed. Please read the FULL DISCLAIMER the link to which is provided in our profile description.
SGX:D05Long
by mintdotfinance
November 24 BTCUSD BingX Chart Analysis and Today's HeadlineBingX’s Bitcoin Chart Bitcoin is up 1.23% over the last 24 hours and rose to an intraday high of $16,798.00. The Crypto & Fear Index is still in the extreme fear territory, and the relative strength index is below the midpoint, suggesting that the market sentiment is still weak. The liquidity issue of Genesis Trading remains unresolved, but the firm confirmed that it has hired investment bank Moelis & Co to talk with potential investors today. If Genesis Trading solves their liquidity issue in the next few days, the BTC/USDT pair could rise to $17,500. Today’s Cryptocurrency Headline DBS Completes Fixed Income Trade on Onyx Singapore-based DBS Bank said it has completed transactions in fixed-income products through Onyx, JPMorgan Chase's blockchain-based fixed-income trading network, becoming the first Asian bank to use the network. BNP Paribas previously joined JP Morgan's blockchain network Onyx for fixed-income trading. Goldman Sachs (GS) has also tapped JPMorgan's network Onyx for repo transactions. Disclaimer: BingX does not endorse and is not responsible for or liable for any content, accuracy, quality, advertising, products, or other materials on this page. Readers should do their own research before taking any actions related to the company. BingX is not responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods, or services mentioned in the article.
by BingX
DBS rallies ahead of tomorrow's earnings reportThe stock has been performing well ahead of its earnings reports, thanks to the news that DBS will be the bank to utilise MaxxDigital – a digital asset platform that provides risk and FX solutions for institutions. Whilst Singapore’s regulators continue to clamp down on crypto trading for retailers, Singapore wants to become a digital-asset hub within the financial sector – and this could be the first step of many which help them do just that. DBS rose 3.6% on Friday following the announcement and has extended those gains to around 6% at the time of writing from Friday’s low. According to Reuters, 13 analysts recommend DBS stock for a ‘buy’ (4 of which are a strong buy) with 4 holds and no sell recommendations. The stock currently trades at 34.58 and has a median price target of 39.11 (+13%). DBS Daily Chart: The daily chart shows that DBS performed a strong breakout (with high volume) from its sideways range after prices found support at the 200-day and 50-day EMA’s. And that suggests it could be part of the bullish trend from the July low. However, there are a couple of warning signs that it may need to retrace a little before continuing higher. A bearish pinbar formed on Monday with low volume, and yesterday’s price action struggling to convincingly push higher. Gap resistance, $35 and the monthly R1 pivot point are nearby and RSI (2) is overbought - which can indicate a near-term turning point. With that said, the RSI(14) is over 50 and trending higher with prices, which is another reason we suspect any move lower is part of a retracement before prices head for the high around 36.30. Of course, earnings can be full of surprises and we may need to see DBS beat estimates for it to trade directly higher. Otherwise – assuming earnings is not too disappointing – it could help with a desired pullback, where we would seek bullish setups around the monthly pivot / prior breakout range.
SGX:D05Long
by CityIndex
November 1 BTCUSD BingX Chart Analysis and Today's HeadlineBingX’s Bitcoin Chart According to the latest CoinShares report, digital asset investment products saw a net inflow of $6.1 million last week. Bitcoin is down 0.68% over the last 24 hours and fell to an intraday low of $20,240.00. The volatility of Bitcoin has reduced since Saturday, as markets prepared for the latest U.S. Federal Reserve policy meeting. The Fed is expected to hike rates by 75 basis points this week, as core inflation remains at historical highs. Investors will look for any signals the Fed may be considering a deceleration in interest rate hikes in the future. If the Fed pivots from its hawkish interest rate hikes, we could witness all risk assets rise in the future. Today’s Cryptocurrency Headline Singapore Pilots Tokenized Fiat with Smart Contract Capabilities Singapore-based financial services group DBS is partnering with Open Government Products, a tech team within the Singapore government, to pilot the tokenization of the digital Singapore dollar. The pilot is part of the MAS-led CBDC technology exploration project “Project Orchid” launched last year to enable a programmable digital Singapore dollar. DBS will issue digital Singapore dollars, while Open Government Products will enable smart contract capabilities in the future. Disclaimer: BingX does not endorse and is not responsible for or liable for any content, accuracy, quality, advertising, products, or other materials on this page. Readers should do their own research before taking any actions related to the company. BingX is not responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods, or services mentioned in the article.
by BingX
September 24 BTCUSD BingX Chart Analysis and Today's HeadlineBingX’s Bitcoin Chart The Dollar Index (DXY) has increased to 113.02, a 20-year high, which imposed strong pressure on risky assets. The S&P 500 index has declined about 1.72% today, while the Nasdaq Composite is down 1.8%. Bitcoin is down 0.84% over the last 24 hours and fell to an intraday low of $18,530.81. The relative strength index (RSI) is just below the midpoint, indicating a minor advantage to bears. The largest cryptocurrency has been trading between $18,126 to $19,966 since Sept. 19, showing that the bulls are defending $18,000, but they are unable to push the price above $20,000. For now, buyers need to push the price above the 20-day exponential moving average (EMA) ($19,904) to establish a relief rally. Today’s Cryptocurrency Headline DBS Bank Expands Its Crypto Trading Service for Wealthy Investors Singapore-based financial services group DBS has widened access to crypto trading services at its members-only digital exchange DBS Digital Exchange (DDEx). The launch of the crypto trading feature comes at a time when DBS wealth clients are increasingly choosing self-directed options. Accredited wealth clients will now be able to trade BTC, BCH, ETH and XRP on DDEx with a minimum investment of $500. Disclaimer: BingX does not endorse and is not responsible for or liable for any content, accuracy, quality, advertising, products, or other materials on this page. Readers should do their own research before taking any actions related to the company. BingX is not responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods, or services mentioned in the article.
by BingX
1
DBS also has downside riskDBS, the biggest component of the STI, appears to have great downside risk. Breaking below support of 29.60, after a lower high, means a lower low is put in place. The weekly chart already had a Bearish Engulfing last week, and this week (left with 1.25 days) closing down below 29.60 to end the week would be another toppish candlestick pattern called the Three Outside Down pattern. Bad for tops. MACDs and RPMs look like shite... heads up. Oh, btw... may be a couple of weeks for this to pan out IF it really breaks down.
SGX:D05Short
by Auguraltrader
SG: DBS ran out of juice...Just saw this weekly chart of DBS (D05)... After a spectacular and amazing run up, DBS is clearly stalling out and poised to fall a good 10%, maybe more. Candlestick patterns show a bearish inside candle, fallowed by another that gapped down. point here is that if this is still remotely bullish, there should be better patterns and signs of strength somewhat. MACD has stalled and is pretty much turning down. the RPM and Volume Divergence all convergently signal downside to follow. Notably, the recent spike broke out of a rising channel, and came back in... as with most pattern analysis, this type of breakout failure warrants a follow through out of the other side. Bearish looking for DBS expected... As DBS makes up a significant part of the STI, we can expect the STI to behave similarly too...
SGX:D05
by Auguraltrader
DBS: Triple Tops or Bullish Triangle Breakout?SGX:D05 is in the crossroad, either the Triple Tops will prevail or it will be a bullish breakout. Based on the current formation, and if we combined with Supply and Demand; it is wiser to wait for Long Setup rather than Shorting it. As at today there is no LL yet and overall still Buyer in control. Here is my personal call: Buy Stop at $21.65 Stop Loss at $21.30 Take Profit at $23.00 Risk Reward Ratio = 3.97R Potentially, you can buy yourself an iPhone 12 Pro Max 512Gb by end of the year, if you place 1 lot on DBS. Good Luck! Disclaimer : The analysis above for educational purposes only, I do not responsible for your losses. Please adjust your own lot-sizing according to your appetite. If you are benefiting from my trade opinion, please buy me coffee. As always, move your SL when you are in the profit zone.
SGX:D05Long
by machintose
Opportunity to LONG DBSI spot a potential entry to LONG SGX:D05 in the coming days with a good RR. Almost a month DBS is ranging from $21 to low $20ish, the consolidation is getting tighter and compression needs to be released. To cut the story short, here is my personal call: Buy Limit at $20.00 Stop Loss at $19.50 Take Profit at $21.60 Risk Reward Ratio = 3.12R Disclaimer : The analysis above for educational purposes only, I do not responsible for your losses. Please adjust your own lot-sizing according to your appetite. If you are benefiting from my trade opinion, please buy me coffee. As always, move your SL when you are in the profit zone.
SGX:D05Long
by machintose
2