DBS – hits 52-week high, all-time overbought since 1991! (1 Dec 16)

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DBS hit another 52-week high today. It has surged 19% from an intraday low of $14.97 on 9 Nov 2016 to $17.82 on 1 Dec 2016. This has significantly outperformed the STI by a mile, as STI was only higher by 6.0% over the same period.

What has caused the sharp rally in DBS?

Some of the possible reasons may be

  1. Since Donald Trump’s victory, the market has repriced in faster inflation in the U.S. due to Mr Trump’s infrastructure pledge. This has caused a surge in US Dollar and bond yields, especially on longer-dated debt. This bodes well for the banks, as they can benefit from rising net interest margins. Most analysts believe that DBS is primed as the best beneficiary from this scenario. Table 1 illustrates the banks’ performance;

Table 1: Local banks’ price performance

With regard to the point above, not …

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