DBS and Paragon REIT 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 and also share more about DBS and  Paragon REIT.

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

Weekly Market Review

2:15 - Macro Update

• Global markets saw strong performance last week, with the S&P 500 going above the 6,100 level and the Nasdaq surpassing 20,000 points, driven by expectations that Donald Trump would delay tariffs.
• The STI also hit an all-time high above 3,900 points at one point, before coming back down but still closing the week 0.4% higher.
• Trump's announcement of a "fair and reciprocal trade plan," which delays new tariffs until April 1 for further evaluation, lifted investor sentiment as it opened the door for trade negotiations
• US inflation data showed a 3% year-on-year increase in January, exceeding market expectations.
• However, markets largely overlooked this due to optimism surrounding trade developments.

4:28 Singapore market updates

STI Top performers:

• Seatrium
• Yangzijiang Shipbuilding
• Genting Singapore
• Singtel
• Venture
• 

STI worst performers:

• SGX
• Mapletree Industrial Trust
• DFI Retail Group
• CapitaLand Ascendas REIT
• Thai Beverage

5:40 - DBS

• DBS reported strong earnings, with net profit rising 10% to $2.62 billion, supported by growth across all key financial metrics.
• The bank’s net interest margin remained resilient at 2.15%, leading to an increase in net interest income to $3.7 billion in Q4.
• Q4 wealth management fee income surged 41% year-on-year to $520 million, contributing to total fee income of $1.2 billion.
• DBS also benefited from higher non-interest income, further boosting profits.
• The bank raised its Q4 dividend to $0.60 per share, bringing total 2024 dividends to $2.22.
• The bank also announced a capital return dividend for 2025
• While DBS trades at a PE of 11 times and a price-to-book ratio of 1.9, both above historical averages, strong earnings partly justify the valuation.
• Dividend yield may rise to 6.7% in 2025 if the projected payouts materialise.

Read also: DBS reports 10% profit growth and unveils capital return dividend: Our Quick Take

Related Links:

• DBS share price history and share price target
• DBS dividend history and dividend forecasts

10:07 - Paragon REIT

• Paragon REIT's sponsor, Cuscaden Peak, has offered to privatize the REIT at 98 cents per share, with an additional 233 cents cash distribution for the second half of FY2024.
• The offer price represents a price-to-NAV of 1.07 times, exceeding the S-REIT retail peer average, Paragon REIT historical averages and historical privatisation averages.
• Rationale for the privatisation includes low trading liquidity, which limits the REIT's ability to raise capital, and an upcoming major asset enhancement initiative at Paragon, its key asset, costing $300–$600 million over 3–4 years.
• As such, this project presents execution risks and could significantly impact distributions, with potential reductions of DPU of up to 64%.
• The scheme requires approval from more than 75% of unit holders by voting rights from unitholders and more than 50% by number of unit holders at the EGM, with Cuscaden Peak abstaining from voting.
• The process is expected to progress with a scheme document dispatch in March, a potential EGM in April, and, if approved, the payout in May 2025.

Read also: Paragon REIT's privatisation offer at S$0.98 per unit. What should unitholders do?

Related Links:

• Paragon REIT share price history and share price target
• Paragon REIT dividend history and dividend forecasts

17:35 - Technical Analysis

STI Technical Analysis

• The Straits Times Index (STI) reached a new all-time high of 3,921 points, driven by strong DBS earnings and a significant rebound in Seatrium.
• With UOB and OCBC set to announce their results soon, the STI could potentially retest the 3,921 level and target 4,000 by year-end.
• Key support levels include the 20-day moving average at 3,833 and the 50-day exponential moving average at 3,801, with any dip below 3,800 seen as a buying opportunity.
• Technical indicators, including MACD and RSI, suggest a sustainable uptrend without overbought conditions.
• Upcoming bank earnings could provide further momentum, with UOB’s results this week and OCBC’s on February 26 key catalysts to look out for 

Dow Jones Technical Analysis

• The Dow Jones Index declined 0.37% last Friday and 0.48% for the week, though it remains supported by the 20-day moving average.
• However, the MACD has turned negative, indicating a possible technical pullback towards the lower Bollinger Band or the 50-day exponential moving average, which converges around the 43,850 level—an accumulation point to watch.
• The RSI has slightly declined but remains at a neutral 55, suggesting some continued upward momentum.
• If a pullback occurs, the lower Bollinger Band is expected to provide support, potentially leading to a rebound.

S&P 500 Technical Analysis

• The S&P 500 was muted on Friday but gained 1.5% for the week, bringing it within 10-15 points of its all-time high at 6,128.
• A new record high is likely, especially with NVIDIA's earnings announcement on February 26.
• The MACD remains positive, indicating continued upward momentum, and US Futures trading is in the green, suggesting a positive US market open.
• The RSI at 58 further supports the uptrend. If the index surpasses 6,128, the next potential target is 6,200, especially if NVIDIA delivers strong results.

Nasdaq Composite Technical Analysis

• The NASDAQ Composite was the top performer among US indices last week.
• The index surpassed 20,000 points and is approaching its December all-time high of 20,200, with just 180 points to go.
• The MACD remains positive, signaling continued upward momentum, while the RSI at 58 also supports the ongoing uptrend.
• NVIDIA's earnings on February 26 could be a key catalyst for retesting the all-time high.

What to look out for this week

• Monday, 17 Feb: Elite UK REIT Ex-Dividend
• Tuesday, 18 Feb: Astrea Investor Day 2025 – An event by Azalea, Singapore Budget 2025, Paragon REIT Ex-Dividend
• Wednesday, 19 Feb: UOB earnings, Digital Core REIT Ex-Dividend, First REIT Ex-Dividend, Far East Hospitality Trust Ex-Dividend
• Thursday, 20 Feb: SIA, Genting Singapore earnings, US FOMC meeting minutes
• Friday, 21 Feb: Seatrium, SATS, Venture earnings
• Check out the full list of Singapore stocks, REITs and ETFs with upcoming dividend payments with our dividend calendar.

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