Singapore banks and SATS in focus: Weekly Review with SIAS

Stocks

By Gerald Wong, CFA • 26 Aug 2024

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We share about Singapore banks and SATS in the latest Weekly Market Review.

In this article

What happened?

In this week's Weekly Market Review in partnership with Securities Investors Association Singapore (SIAS), we discuss the gains in global stock markets and also share more about the following:

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

The S&P 500 rebounded to close higher at 5,600 points, marking a strong week for US stocks.
The Straits Times Index (STI) rose by 2.4%, pushing back above the 3,380 level, driven by positive market sentiment.
The Consumer Price Index (CPI) increase in Singapore moderated, with core CPI for July rising by just 2.5% year-over-year.
US one-year government bond yields fell to 4.4%, the lowest level in a year, driven by declining inflation and rate cut expectations.
Investor confidence surged as market expectations solidified, with a 76% probability of a 25 basis point rate cut and a 24% probability of a 50 basis point cut in September.

STI top performers 26 August 2024

STI Top performers:

STI worst performers 26 August 2024

STI Worst performers:

Year-to-date, DBS is up 17.5%, OCBC 10.8%, and UOB 6.8%, all outperforming the Straits Times Index.
DBS saw significant growth in net profit, OCBC's profit increased by nearly 10%, while UOB's profit slightly declined compared to last year.
Profit growth was supported by increased fee income, particularly from wealth management, with assets under management rising across all three banks.
DBS reported a stable net interest margin of 2.14% in Q2 2024, while UOB's margin fell to 2.05% and OCBC's to 2.2%.
Loan growth was modest, with a 2% year-over-year increase in the second quarter, non-performing loans remained low.
All three banks increased their dividend payouts in the first half of 2024, with DBS offering a yield of 6.4%, OCBC 6.3%, and UOB 5.9%.

SATS' share price rebounded significantly last week, rising more than 10% to $3.57, recovering from a low of about $2.40 in April.
In the first quarter of fiscal year 2025, SATS reported a profit of $65 million, a turnaround from a $30 million loss in the same period last year.
Revenue increased by 15.5% year-over-year, with growth across all business segments, including cargo, ground handling, and both aviation and non-aviation businesses.
Regionally, revenue growth was broad-based, with Singapore up 18.7%, the rest of Asia up 36%, and growth also seen in EMEA and the Americas.
The revenue growth was driven by an increase in flights handled, higher cargo tonnage, and more meals served across SATS' operations.
SATS improved its financial position this quarter, with total debt slightly reduced and net debt as a percentage of EBITDA decreasing due to strong EBITDA growth.
SATS is currently valued at a price-to-earnings ratio of about 21 times and a price-to-book ratio of 2.2 times, both of which are still below the historical average.

STI Technical Analysis

The STI Index is currently influenced by the strong performance of local banks and a favourable interest rate outlook.
Recent gains indicate a positive trajectory, supported by bank performance and expected lower interest rates.
The MACD recently crossed above the signal line on August 19, with potential to move above the zero baseline, signalling increased upward momentum.
The RSI is at 56, above the neutral 50 mark, with room to rise before hitting the overbought level of 70. The previous RSI high was 78.

Dow Jones Technical Analysis

The Dow Jones is at 41,176 points, close to its all-time high of 41,376 points.
The index shows strong momentum, fueled by positive sentiment following recent Fed announcements.
It is above both the 50-day and 20-day moving averages, indicating continued bullish sentiment.
The MACD indicates a strong uptrend, while the RSI at 63 suggests potential for further gains.

S&P 500 Technical Analysis

The S&P 500 is at 5,635 points, just shy of the all-time high of 5,669 points.
The index is exhibiting strong momentum with a potential to retest the all-time high, particularly with upcoming earnings reports.
It is above both the 50-day and 20-day moving averages, reinforcing the bullish trend.
The MACD remains positive with a recent crossover, and the RSI at 61 indicates continued upward potential with room for further gains.

NASDAQ Composite Technical Analysis

The NASDAQ Composite is currently at 17,878 points, with room to move toward the all-time high of 18,671 points.
The MACD shows a strong uptrend with 17 consecutive positive readings, despite some profit-taking on Thursday.
The RSI is at 57, above the neutral 50 mark, with room for further growth before reaching the overbought level of 70. The previous RSI high was 80.

Tuesday, 27 Aug: SGX Academy Webinar: Singtel backs merger of Intouch and Gulf: Paving new avenues of growth?, SSB application closing date
Wednesday, 28 Aug: Nvidia earnings
Thursday, 29 Aug: US GDP growth data
Friday, 30 Aug: US PCE index data

Get the full list of Singapore stocks, REITs and ETFs with upcoming dividend payments with our dividend calendar.

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