DBS, UOB and OCBC in focus: Weekly Review with SIAS

What happened?

In this week's Weekly Market Review in partnership with Securities Investors Association Singapore (SIAS), we discuss key developments in the global equity market alongside DBS, UOB and OCBC.

Watch the video to learn more about what we are looking out for this week.

Weekly Market Review

1:45 - Macro Update

• Market performance was mixed last week, with the S&P 500 declining by 0.5% after a strong rally, while Singapore’s STI rose by 0.8% to 3,876 points, nearing its all-time high.
• A key focus was the US Federal Reserve meeting, where the Fed decided to keep interest rates unchanged due to lingering uncertainty around trade tariffs and inflation.
• The Fed’s cautious stance and comments from Chair Jerome Powell led to a rise in US 10-year government bond yields, which climbed back above 4.4%.
• Investors now expect the Fed to hold rates steady in both June and July, with possible but uncertain rate cuts starting in September or later in the year.
• In Singapore, industrial companies like Citroen, ST Engineering, and SEDS led the gains, while several REITs declined after going ex-dividend.
• Despite reporting first-quarter earnings, Singapore banks such as DBS, OCBC, and UOB underperformed year-to-date due to concerns that trade tariffs could weigh on loan growth, margins, and credit quality.

STI Top performers:

• DFI Retail Group
• Seatrium Limited
• ST Engineering
• SATS
• Singtel

STI worst performers:

• Mapletree Industrual Trust
• Mapletree Logistics Trust
• Venture Corporation
• Yangzijiang Shipbuilding
• Frasers Logistics & Commercial Trust

5:28 - DBS

• DBS reported a flat year-on-year profit before tax, up just 1% in Q1 2025, although profit before allowances rose 6% due to stronger core operations before accounting for provisions.
• The bank’s net interest margin declined slightly from 2.15% in Q4 2024 to 2.1% in Q1 2025, reflecting the broader trend of falling interest rates.
• This decline was offset by strong fee income growth, which rose 18% year-on-year to $1.5 billion, mainly driven by a 35% increase in wealth management fees to $724 million.
• DBS took a general allowance of $205 million as a precautionary measure in light of trade tariff uncertainties, despite no signs of loan quality deterioration, raising its allowance coverage ratio to 137%.
• The bank declared a total dividend of $0.75 per share, including a $0.60 ordinary dividend and a $0.15 capital return, exceeding the $0.54 dividend paid in Q1 2024.
• While acknowledging risks from trade disruptions and rate volatility, DBS also sees potential opportunities from shifting trade flows and wealth inflows, and expects 2025 net interest income to slightly exceed 2024 levels assuming three rate cuts.

Related Links:

• DBS share price history and share price target

8:52 - UOB 

• UOB reported flat net profit of $1.49 billion in the first quarter of 2025, although both total income and operating profit increased compared to the previous year.
• The bank’s net interest margin remained stable at 2%, allowing it to grow net interest income year-on-year despite the broader interest rate headwinds.
• Fee income also rose to $896 million from $755 million the year before, with key contributions coming from continued growth in wealth management and credit card fees.
• Similar to DBS, UOB took a preemptive general allowance of $133 million in light of the uncertain macroeconomic environment, although there was no immediate deterioration in asset quality.
• Unlike DBS, UOB has decided to suspend its 2025 financial guidance due to the heightened macro uncertainty and will only resume guidance when the situation stabilizes.
• Overall, UOB's performance reflects resilience in core banking operations, particularly in net interest income and fees, while maintaining a cautious outlook amidst external risks.

Related Links:

• UOB share price history and share price target
• How UOB is weathering trade tensions: Key insights from Corporate Connect webinar

10:30 - OCBC

• OCBC saw a decline in net interest income compared to the previous year, with total income remaining flat and higher allowances taken during the quarter.
• The bank’s net interest margin fell sharply to 2.04% in Q1 2025, down from 2.15% in Q4 2024 and 2.27% in Q1 2024, reflecting greater pressure from falling rates.
• OCBC recorded strong growth in non-interest income, particularly in fee income, which rose to $546 million from $479 million a year ago.
• The growth in fee income was largely driven by wealth management, with related fees increasing from $228 million to $269 million year-on-year.
• OCBC made $118 million in general allowances for non-impaired assets as a precautionary buffer, citing macro uncertainties despite stable loan quality.
• The bank maintained its 2025 financial targets, including a net interest margin around 2%, a 60% total dividend payout ratio, and a $2.5 billion capital return program over two years through dividends and share buybacks.

Related Links:

• OCBC share price history and share price target

14:32  - Technical Analysis

Straits Times Index

• The STI rose by 0.8% last week, driven mainly by gains in the local banks with DBS up over 1%,
• All three banks now offer attractive dividend yields of around 6%
• The STI has climbed above the 3,900-point mark, supported by positive developments from the US-China trade talks, which triggered a 26-point (0.7%) jump to 3,902 points at the start of the week.
• The next resistance level is seen at 3,950 points—a mini double top—followed by the all-time high of 4,005 points, which may be tested in the coming weeks if momentum continues.
• Market sentiment has turned more bullish as tariffs have been rolled back or extended, creating a "risk-on" environment that is expected to last until key deadlines in July (Europe) and August (China).
• Technical indicators remain supportive, with the MACD showing an upward trend and the RSI at a healthy 61, suggesting the STI’s positive momentum could continue until it approaches the overbought level near 70.

Dow Jones Industrial Average 

• The Dow Jones surged by 1,160 points on Monday, closing at 42,410, which pushed it above both the 100-day and 200-day moving averages—an encouraging sign for a potential bullish trend.
• Staying above these key moving averages signals renewed investor confidence and risk appetite, which could support further upside in US equities.
• The next resistance level to watch is around 43,300 points, where the index faced selling pressure back in late December.
• If this level is breached, the Dow could advance toward higher targets such as 44,400 or potentially retest the all-time high near 45,000 points.
• Technical indicators remain supportive, with the MACD suggesting sustained upward momentum since the rebound began in mid-April.
• The RSI is currently at a healthy level of 62, indicating strong buying momentum without being overbought, which supports the case for continued gains toward the 43,300 resistance in the coming weeks.

S&P 500 Index

• The S&P 500 jumped 3.2% or 184 points on Monday, closing at 5,844 and successfully breaking above the 200-day moving average, a key technical resistance often referred to as the "final boss" for a confirmed bull trend.
• This breakout was supported by positive sentiment from US-China trade talks and places the index in a strong support zone that was previously tested during the December and January periods.
• The next resistance level is at 6,000 to 6,012 points, which corresponds to the November high, and beyond that, the index may aim for the 6,150 level near its all-time high.
• The MACD indicator shows continued upward momentum since the April rebound, suggesting that the bullish trend is likely to extend into the coming weeks.
• The RSI is currently at 65, indicating strong momentum without entering overbought territory yet, which supports the case for further upside.
• However, if the RSI crosses above 70, there may be a round of profit-taking and consolidation, similar to what was observed in December, before the next significant move.

NASDAQ Composite Index

• The NASDAQ Composite Index was the top performer on Monday, rising 4.35% or 780 points, and successfully broke above the 200-day moving average, a key technical level for confirming bullish momentum.
• With this breakout, the index is on strong footing to continue climbing, with the next resistance level at 19,300 points, the high last seen on 8th November.
• Beyond 19,300, there are no major resistance levels until the all-time high near 20,000 to 20,200 points, last reached in December of the previous year.
• The MACD indicator shows strengthening momentum, with the MACD line pulling further away from the signal line, indicating the uptrend is likely to persist in the near term.
• The RSI is currently at 67, close to the overbought level of 70, though historical patterns show the NASDAQ can push to RSI levels of 75 or 80 during strong rallies.
• With both MACD and RSI supporting continued upside and the upcoming CPI data release potentially serving as a catalyst, the NASDAQ Composite is likely to target the 19,000 level by month-end if inflation data is favorable.

What to look out for this week

• Tuesday, 13 May: Prime US REIT earnings, US CPI data
• Wednesday, 14 May: United Hampshire US REIT, EC World REIT earnings, Beansprout AMA on Singapore Bond ETFs with NikkoAM
• Thursday, 15 May: Manulife US REIT, Sasseur REIT, Singapore Airlines, SingPost earnings
• Friday, 16 May: DBS ex-dividend

Get the full list of stocks with upcoming dividends here. 

Join our Beansprout Telegram group for the latest insights on Singapore stocks, REITs, bonds and ETFs.