DBS and OCBC shares hit all-time highs: Weekly Review with SIAS

What happened?

In this week's Weekly Market Review in partnership with Securities Investors Association Singapore (SIAS), we discuss the rally in the US stocks and discuss the top performing Singapore blue chip stocks in the first half of the year.

• Yangzijiang Shipbuilding
• DBS
• Singtel
• OCBC
• ST Engineering

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

Weekly Market Review

2:20 - Macro Update

• US stocks saw a positive week, with the S&P 500 up 2%, driven by a 3.4% gain in tech stocks. Singapore's STI outperformed the S&P 500, gaining 2.3% over the past week.
• The latest US payroll data indicated a softening labor market, with fewer jobs created in June compared to May and downward revisions for April and May. 
• The US unemployment rate rose to 4.1%. Fed Chairman Powell mentioned progress in controlling inflation, increasing investor confidence in potential interest rate cuts.
• US bond yields declined sharply, falling from above 4.4% to about 4.28% in the past week. The CME FedWatch tool shows that investors now anticipate a 72% probability of a rate cut in September, followed by another potential cut in December, totalling two rate cuts this year.

4:36 - Singapore market updates

STI Top performers in the past week: 

• DBS share price
• Seatrium share price
• OCBC share price
• UOB share price
• Singtel share price

STI Worst performers in the past week

• Yangzijiang Shipbuilding share price 
• Frasers Logistics & Commercial Trust share price
• Thai Beverage share price
• Genting Singapore share price
• DFI Retail Group share price

7:07 - Top performing Singapore blue chip stocks in the first half of 2024

Yangzijiang Shipbuilding

• Yangzijiang Shipbuilding has shown strong performance, driven by impressive order momentum.
• They secured $3.3 billion worth of contracts in the first few months of the year, achieving 74% of their 2024 target of $4.5 billion.
• This continues a positive trend from 2023, where they won $7 billion in orders, with strong demand for various vessel types, particularly oil tankers and gas carriers, driven by the global energy transition.

Related links:

• Weekly Review with SIAS: Yangzijiang Shipbuilding, hospitality stocks in focus
• Yangzijiang Shipbuilding share price and analysis
• Yangzijiang Shipbuilding dividend history

Singtel

• Singtel has performed well, largely due to its "Singtel 28" strategy announced two months ago, aiming to drive sustained value realisation through business performance improvements and better capital management.
• Singtel introduced a new dividend policy with a core dividend of 70-90% of underlying net profit after tax and an additional value realisation dividend of 3-6 cents per share annually, funded from current and future excess capital from asset recycling.

Related links:

• kopi-C with Singtel’s Group CFO: ‘We impact the lives of more than 700 million people’
• Singapore Telecommunications Ltd (Singtel) share price and analysis
• Singapore Telecommunications Ltd (Singtel) dividend history

ST Engineering

• ST Engineering has experienced significant revenue growth in the first quarter, driven by a strong recovery in the commercial aerospace segment.
• The global bounce in air travel has increased demand for their maintenance, repair, and overhaul services for commercial aircraft, boosting their order book from $19.3 billion at the end of 2021 to nearly $28 billion by the first quarter of this year.

Related links:

• ST Engineering, CICT in focus: Weekly Review with SIAS
• Singapore Technologies Engineering (ST Engineering) share price and analysis
• Singapore Technologies Engineering (ST Engineering) dividend history

Singapore Banks

• DBS and OCBC banks have seen their share prices reach all-time highs, driven by the higher for longer interest rate environment, which is improving net interest margins.
• DBS’s net interest margin increased in the first quarter, while OCBC’s margin remained stable at 2.27%, contributing to DBS achieving an all-time high ROE of 19.4% in the first quarter and OCBC reaching an ROE of 14.7%.
• Current dividend yields for DBS, OCBC, and UOB are 5.8%, 5.6%, and 5.2% respectively, higher than the STI average, making them attractive to investors.

Related links:

• Beansprout Insight: DBS soars to all-time high. Still worth buying at 6.1% dividend yield?
• Beansprout Insight: OCBC offers to privatise Great Eastern. What should shareholders do?
• DBS rises more than UOB and OCBC after record profit. Still a better buy?
• DBS Group share price and analysis
• DBS Group dividend history
• OCBC share price and analysis
• OCBC dividend history

15:29 - Technical Analysis

Straits Times Index (STI)

• The STI is down about four points in early Monday trade, following a 2.3% gain last week.
• The MACD shows decreasing momentum, and the RSI has dropped from 70 to 65, indicating a potential pullback.
• A pullback to the 20-day moving average (around 3,340 points) is expected, presenting a potential accumulation opportunity.

Dow Jones Index

• The Dow Jones has lagged behind other U.S. indices, with recent gains led by tech stocks.
• The MACD and RSI indicators show slight positive momentum.
• Key support levels are the 50-day moving average (around 38,957 points) and the 100-day moving average (around 38,587 points).

S&P 500 Index

• The S&P 500 is at an all-time high, with the MACD at peak levels indicating a continued rally unless a negative reading appears.
• The RSI at 76 suggests an overbought condition, potentially leading to a pullback.
• Key levels for accumulation are the 20-day moving average (around 5,452 points) and the 50-day moving average (around 5,340 points).

NASDAQ Composite Index

• The NASDAQ was up more than 3% last week, but has breached the upper bound of the Bollinger Band, indicating a potential correction.
• Key levels to watch are the 20-day moving average (around 17,699 points) and the 50-day moving average (around 17,140 points).
• The MACD indicates positive momentum, but the RSI at 75 suggests an overbought condition, recommending caution for re-entry.

What to look out for this week

• Monday, 8 July: Singapore Gross Domestic Product (GDP) data
• Thursday, 11 July: US Consumer Price Index (CPI) data
• Friday, 12 July: JP Morgan, Citi earnings

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

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