DBS vs OCBC and UOB - Part 2

Jirachi

Jirachi

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Dam it. This is the Asian market reconciling to the China hit back after marked closed on Friday... Magnitude should be as big as the sell-off in the US market on Friday.
 
boroangel

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Have been at about 10 to12% equity / 88 to 90% T-bills bonds FD for over a year now so I missed most of the run up in the stock market in last 1.5 to 2 years. Started purchasing S-reits (mainly FCT and CICT since December and now my equity base is around 17%.

More interested in long term cashflow due to job uncertainty and looking to increase my positions in the 3 local banks for long time now. Last purchases were in 2020 after Covid. The next 6 months really looks like good time to get to 15% target allocation in my portfolio for the 3 local banks. Plan is to have SG stocks and S-reits that generates good dividends come up to about 25% of my overall portfolio. Other 25% in US index and 50% in bonds/T-bills/FD. (I am more of a safety player).

Talking about the SG banks, give recession risks, I suppose the lows will generally come after the interest rates have been lowered a while? Looking at previous downturns from 97/2000/2008/2020, looks like the lows tend to come between 6 months to a year for the local banks.

For those looking to increase their stakes in the 3 local banks, curious how you are planning your purchases in the coming weeks and months?
 
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SpeedingBullet

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boroangel said:
Have been at about 10 to12% equity / 88 to 90% T-bills bonds FD for over a year now so I missed most of the run up in the stock market in last 1.5 to 2 years. Started purchasing S-reits (mainly FCT and CICT since December and now my equity base is around 17%.

More interested in long term cashflow due to job uncertainty and looking to increase my positions in the 3 local banks for long time now. Last purchases were in 2020 after Covid. The next 6 months really looks like good time to get to 15% target allocation in my portfolio for the 3 local banks. Plan is to have SG stocks and S-reits that generates good dividends come up to about 25% of my overall portfolio. Other 25% in US index and 50% in bonds/T-bills/FD. (I am more of a safety player).

Talking about the SG banks, give recession risks, I suppose the lows will generally come after the interest rates have been lowered a while? Looking at previous downturns from 97/2000/2008/2020, looks like the lows tend to come between 6 months to a year for the local banks.

For those looking to increase their stakes in the 3 local banks, curious how you are planning your purchases in the coming weeks and months?
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Just remember that banks (all banks, not just SG) are basically levered cyclical bets on a country's economic well being.

Interest rates plays a huge role in their earnings, but NPL write-downs have a bigger downside impact on their price movements. Best time to invest in banks apart from recessions is when the NPLs start rising and you see some blood. This happened twice recently: COVID for obvious reasons, and the oil shock in 2016. On the latter, the economy was doing well but NPLs rocketed because of weak oil that led to a few blowups, most notably Swiber. Swiber and those distressed OilCos had loans from our local banks, the banks had to write down debt and provision 100s of millions in doubtful debt. This sparked a small panic in bank shares - everyone was fearful, no one knew which bank was exposed and to what degree were they exposed. Full disclosure, I bought a sh1t ton of OCBC in 2016, held on to it ever since, never added (regretting this now).

On interest rates, just look at share price performance of the 3 banks during ZIRP, which goes back 20 years, they did quite OK, but relative to REITs, they underperformed. So a barbell strategy (REIT - Bank) might work well since you're looking at REITs. DYODD.
 
boroangel

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SpeedingBullet said:
Just remember that banks (all banks, not just SG) are basically levered cyclical bets on a country's economic well being.

Interest rates plays a huge role in their earnings, but NPL write-downs have a bigger downside impact on their price movements. Best time to invest in banks apart from recessions is when the NPLs start rising and you see some blood. This happened twice recently: COVID for obvious reasons, and the oil shock in 2016. On the latter, the economy was doing well but NPLs rocketed because of weak oil that led to a few blowups, most notably Swiber. Swiber and those distressed OilCos had loans from our local banks, the banks had to write down debt and provision 100s of millions in doubtful debt. This sparked a small panic in bank shares - everyone was fearful, no one knew which bank was exposed and to what degree were they exposed. Full disclosure, I bought a sh1t ton of OCBC in 2016, held on to it ever since, never added (regretting this now).

On interest rates, just look at share price performance of the 3 banks during ZIRP, which goes back 20 years, they did quite OK, but relative to REITs, they underperformed. So a barbell strategy (REIT - Bank) might work well since you're looking at REITs. DYODD.
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Thank you and very nice sharing.
 
luei74

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Anyone managed to catch OCBC <$15??🙏🙏
 
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A

artncraft

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Rospenn said:
All 3 banks in free fall territory
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Some businesses might collapse, and the banks will write off the loans.

In recent years, they have expanded aggressively overseas, and those markets have very high tariffs.

It is still early to know how much their exposure is.
 
S

sky1978

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DevilPlate said:
UOB and OCBC will drop to PB:1?
That will be a good price to whack
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UOB should have reached your target during the first few minutes of yesterday's opening. If you add the projected Q1 profit EPS without accounting for their dividend payout, yesterday's low should be PB 1.
 
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