ocbc bank sgx stock investment

OCBC Bank is an undervalued stock as compared to its peers with strong earning. Read ahead to know why OCBC is the right choice for investment in Singapore.

OCBC Bank, listed in the Singapore Stock Exchange (SGX), is one of the most trusted company in Singapore in the finance sector. It is world’s most highly rated bank with Aa1 ranking by Moody’s. It comes under the Top 50 safest bank, on the list provided by Global Finance. It has been awarded as Best Managed Bank by the Asian Banker.

Having said that, there are still some factors to consider about OCBC bank while investing in Singapore.

Read on to know why Multi Management Future Solutions has chosen OCBC for a stock to watch in Singapore.

OCBC BANK (SGX: O39)

About the company

Oversea-Chinese Banking Corporation Limited or OCBC is the longest established bank in Singapore since 1932, after the merger of three local banks. The Bank is the merger of Chinese Commercial Bank Ltd, Ho Hong Bank Ltd, and Oversea-Chinese Bank Ltd. OCBC Bank offers an extensive range of banking services and financial solutions in business banking, consumer banking, global treasury, international banking, and investment management. The OCBC Group has several subsidiaries that are involved in financial futures, regional stock broking, nominee trustee, custodian services, property development, and hotel management.

It is the second largest financial service groups in Southeast Asia according to the assets it holds. It has 570 branches in 18 countries and regions. The major competitors of OCBC bank in Singapore are DBS Group Holding Ltd and United Overseas Bank Ltd.

Latest News On OCBC Bank

  • OCBC reported earnings of $1.25 billion for 3Q18, with an increase of 12% from a year ago, driven by a 23% rise in profit from banking operations.
  • Customer Loan book growth of 10%, Banks net interest margin rose by 6 basis points to 1.72%.
  • Recently in the equation with AI in the banking sector, OCBC Bank has introduced facial recognition for mobile banking.

Fundamental Overview of OCBC BANK

The stock price of OCBC is currently trading at S$11.77 as on 18th January 2018, which is an increase of +0.34%. The market sentiment of OCBC is quite good in spite of recent uncertainties in the Singapore stock market.

With the advent of open banking in global level DBS Group(a competitor of OCBC) and OCBC bank has become the open banking pioneer in Singapore and in Asia.

 

Samuel Tsien, CEO of OCBC Bank has said after the 3rd quarter report, 
“Our performance underscored the competitive strength and quality of our banking, wealth management and insurance franchise in the region. Record quarterly and year to date net profit were achieved through improved NIM, continued loan growth, higher non-interest income, and continued cost management discipline.”


OCBC has a profit contribution from the key market of Singapore, Malaysia, Indonesia, and Greater China.

 

Key Fundamental Data

 

  • Stock trading at 1.38 time of its Book Value
  • Return on equity (ROE) 11.00%
  • Stock trading at current PE of 11.99.
  • EPS forecast S$0.27

 

1 MARKET CAPITALISATION (B) 49.829
2 EARNING PER SHARE (SGD) 0.825
3 DIVIDEND(SGD) 0.39
4 DIVIDEND YIELD(%) 3.47
5 PE 10.8
6 52 WEEK PRICE RANGE(S$) 10.36-14.04


Annual financial report for 2018 of OCBC bank is yet to come but the financial data including revenue, return on equity over the last three years till 30th September 2018 is provided below.

 

  2016 2017 2018
Revenue(M)($) 7763.42 8963.84 9835.84
Net Income(M)($) 3473.092 4146.43 4701.43
DIVIDEND PER SHARE 0.36 0.37 0.39
ROE(%) 9.502 10.84 11.902

 

Technical Overview of OCBC Bank

 

OCBC Bank Technical Overview


On the weekly chart, the stock just crosses and trading above the resistance level of SGD 11.60. Major support for the stock came at SGD 10.80. Stock can further rise to the level of SGD 12-12.17. If the stock closes above 12 for few trading session then the new trading range will from SGD 12 to 12.88.

Volume is good and near the average of 20 weeks volume, price rising and along addition with the addition of volume suggests smart money taking a long position. Ideal entry considering risk-reward ratio came at SGD 11.50 with price assumption above SGD 12.05-12.10.

Technical indicators signaling strong buy and Moving average(20-day period) indicating buying signal at 11.36 as on 18th January.

Below are the major support and resistance data by Fibonacci retracement.

Major support and resistance levels as below:

Symbol S3 S2 S1 Pivot R1 R2 R3
OCBC(O39) 11.16 11.31 11.39 11.54 11.69 11.77 11.92

 

The MMF Solutions Takeaway

Being a blue chip stock in SGX, OCBC has strong market sentiment in Singapore. Many successful Singapore investors find OCBC, a profitable spot to invest. Considering growth in its profit by 23% in the third quarter of 2018, it gives a favorable outlook for investment in 2019.

Investing in OCBC can be a good investment decision but we caution that all the information provided above should be a starting place for your own research while investing SGX.

 

MMF Solutions have strong grip in providing updated blue-chip stock signals along with expert advice on Singapore stock trading, forex trading, and commodity market.
Test our service just by subscribing to our free 3 days trial now!

Leave a comment

Your email address will not be published. Required fields are marked *


Get Connected
Follow Us

Get connected with us on social networks!


Quick Enquiry