SG Market Update - OCBC Investment 2019-05-07: Buy SG Banks On Further Price Correction

Singapore Market ~ OCBC Investment Research | SGinvestors.io DBS GROUP HOLDINGS LTD (SGX:D05) UNITED OVERSEAS BANK LTD (SGX:U11)

SG Market Update - Buy SG Banks On Further Price Correction

  • Equities correction.
  • Banks fell about 4% on Monday.
  • Buy on further price weakness.



Event: Equities reacted to Trump’s comment

  • On Sunday, Trump said he would increase tariffs on US$200 billion of Chinese imports from 10% to 25% on Friday. He also mentioned that he would impose duties on US$325 billion of Chinese goods currently not subject to tariffs.
  • Equity markets reacted on Monday and in Asia, the Singapore market fell 3.0% while the CSI 300 Index fell 5.8%, but both managed to close off the day’s lows. This was the same for the S&P 500 Index, which recovered from the day’s low (-1.6%) to post a more modest loss of 0.4%.


Impact: Probability of more tariffs has increased

  • Meantime, according to wire reports, the Chinese delegates are still going ahead with the trade meeting this week.
  • With this sudden change of events, the probability of a breakdown in trade talks has increased, and this in turn means that the probability of an increase in tariffs has also similarly moved higher. There will also be heightened uncertainty and volatility in the next few trading days.
  • The VIX index (Chicago Board Options Exchange Volatility Index) has also spiked up to 15.44 on Monday, up 20% from 12.87 on Friday.


Analysis: Accumulation on further price weakness







Carmen Lee OCBC Investment Research | https://www.iocbc.com/ 2019-05-07
SGX Stock Analyst Report HOLD MAINTAIN HOLD 29.180 SAME 29.180
HOLD MAINTAIN HOLD 28.900 SAME 28.900



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