I came across this article, written by DBS CIO Lim Say Boon.
Good read for the weekend!
DBS Group Holdings says it is among the first batch of banks selected by China’s central bank for its cross-border international payments system.
The new system, launched on Thursday, will clear yuan transactions overseas.
“As the first and only Singapore bank chosen for the launch, the bank is committed to leverage its experience in Asian financial markets like Singapore and Hong Kong to support developments in renminbi internationalisation and China’s financial reforms,” DBS says.
The yuan is now widely used for international trade, investments and official reserves.
From the chart, we can see that DBS is still bearish for long term. 20, 50, 200dma showing downtrend.
This is also accompanied by high daily trade volume, serious sellers.
23 Sep Wednesday breakaway gap, supported by high volume -> Bearish enough.
It is nicely resisted by the 50% and around 61.8% fibo, making it a good shorting entry from there on.
Slight support around $16.70 region, but there is also a possibility that it might head lower to $16.22 region.
RSI: Going into oversold region, might see more actions coming
MACD: Not looking good.
I am still bearish on this until I see a good rebound for longing.
Not sure if you guys noticed, all the 3 banking stocks are very very close to their 52 weeks high. All of them tried to test the high before.. but did not succeed. RSI signals are showing signs off them approaching the overbought region too. We can look to see if the Bollinger mid band (20 days moving average) can serve as a support for these counters… 200 days moving average, still uptrending.
52 weeks high
OCBC – $10.53 (Barely grazing the top)
UOB – $24.24
DBS – $20.02
My gut feel tells me that current prices will range for a short period of time, forming new support before embarking on a new uptrend.
Profits inched up but were below expectations.
Analysts remain unimpressed despite the fact that Sembcorp Marine posted a 5.4% increase in net profit for 2Q14 to S$131.6m. Sembcorp’s weakest link is its ship repair revenues, which dipped 5% year on year.
According to OCBC analyst Low Pei Han, Sembcorp Marine’s profit came in below expectations because ship repair was weaker than expected due to lower average revenue per vessel despite a higher turnover rate.
“Day rates in the ultra-deepwater and deepwater floater markets have softened, and there has been undeniably a more muted outlook for these segments in general. Currently, the jack-up market is still holding up, but the outlook may also be more muted in the shorter term,” she added.
Meanwhile, CIMB analyst Lim Siew Khee noted that average repair per vessel plunged to an all-time low of S$1.26m/repair, though repair margins were kept at 20-25%.
“With margin expansion and order momentum priced in, we think there is limited catalyst for stock
outperformance in the near term. The order book stands at S$12.7bn, with S$2.5bn new orders secured YTD,” she stated.
But a glimmer of hope comes from DBS’ Pei Hwa Ho, who notes that the second half of the year may bring good news for Sembcorp Marine.
According to DBS’ report, “We expect higher rigbuilding and repair revenue in the seasonally stronger 2H, with several newbuild and major repair projects hitting initial recognition. Margins should be supported by the higher revenue contribution from rigs using SMM’s proprietary Pacific Class design, ship repair segment and profit recognition from prudent margin projects.”