The InvestQuest’s View: For investors with a medium to long-term horizon, we believe that the Singapore Bank stocks are attractive due to the following reasons.
Valuations are very cheap on a P/B basis and fair on a P/E basis.Dividends are unlikely to fall further, as they can be sustained even with the current levels of depressed profits.Net interest margins are expected to stabilize near current levels, with flattish loan growth.DBS and OCBC have been aggressive in expensing bad debt provisions, which will probably help with an earnings rebound in 2021.Macro factors such as a steepening yield curve and market rotation from growth to value stocks will be additional catalysts if they materialize.On which Singapore Bank is the most attractive, it depends on your investment thesis:
If you are more optimistic about China’s economy, go with DBS as it has a 27% sales exposure to Greater...
