Key Indices
Top Stories
Sector Update | Banking
Maintain OVERWEIGHT. DBS and OCBC have outperformed in wealth management, treasury income and asset quality. OCBC has an added boost from insurance. Our top pick is OCBC (BUY/Target: S$33.35) for its strategic shift to accelerate growth. OCBC is more sensitive to growth in wealth management, which accounted for 63% of its fee income. We also like DBS (BUY/Target: S$80.00) for its 2027 dividend yield of 4.6%.
Company Results | Oversea-Chinese Banking Corp (OCBC SP/BUY/S$30.30/Target: S$33.35)
2Q26 results demonstrate OCBC’s consistency in execution, as it delivered rapid growth in wealth management, trading income and insurance. 2Q26 is the second consecutive quarter of sterling financial performance. Maintain BUY. Target price: S$33.35.
Company Results | United Overseas Bank (UOB SP/NOT RATED/S$43.30)
NPL formation was hefty at S$902m during the quarter due to a single closely monitored real estate account in Greater China. NPL ratio increased 0.1ppt qoq to 1.6%. Credit costs of 28bp were within guidance of 25-30bp.
Company Results | Yangzijiang Shipbuilding (YZJSGD SP/BUY/S$4.20/Target: S$5.30)
• 1H26 net profit of Rmb5.37b (+28.4% yoy) beat our expectations, at 55% of our/consensus full-year forecast, driven by a stronger-than-projected revenue delivery and upbeat shipbuilding margins. A strong orderbook of US$22.4b as of end-1H26, together with good pricing levels of contracts secured, provides good revenue/earnings visibility for YZJ through 2029. Management is confident about meeting its 2026 contract win target of US$4.5b. Maintain BUY with a higher target price of S$5.30 based on a conservative 9.1x 2028F PE.
Market Spotlight
- US stocks were lower on Monday, with all indices falling as the real estate, utilities and information technology sectors fell. There were more decliners than advancers on both the NYSE and NASDAQ.
- The FSSTI rose 59.44 points to 5,698.43, supported by strength in SIA and DBS, with both mid- and small-cap indices rising with a broad market advance on a S$2.63b turnover.
Technical Analysis
AEM Holdings (AEM SP)
- Trading Buy Range: S$9.01-9.02
Venture Corp (VMS SP)
- Trading Buy Range: S$16.83-16.84
Top Stories
Sector Update | Banking
Maintain OVERWEIGHT. DBS and OCBC have outperformed in wealth management, treasury income and asset quality. OCBC has an added boost from insurance. Our top pick is OCBC (BUY/Target: S$33.35) for its strategic shift to accelerate growth. OCBC is more sensitive to growth in wealth management, which accounted for 63% of its fee income. We also like DBS (BUY/Target: S$80.00) for its 2027 dividend yield of 4.6%.
Company Results | Oversea-Chinese Banking Corp (OCBC SP/BUY/S$30.30/Target: S$33.35)
2Q26 results demonstrate OCBC’s consistency in execution, as it delivered rapid growth in wealth management, trading income and insurance. 2Q26 is the second consecutive quarter of sterling financial performance. Maintain BUY. Target price: S$33.35.
Company Results | United Overseas Bank (UOB SP/NOT RATED/S$43.30)
NPL formation was hefty at S$902m during the quarter due to a single closely monitored real estate account in Greater China. NPL ratio increased 0.1ppt qoq to 1.6%. Credit costs of 28bp were within guidance of 25-30bp.
Company Results | Yangzijiang Shipbuilding (YZJSGD SP/BUY/S$4.20/Target: S$5.30)
• 1H26 net profit of Rmb5.37b (+28.4% yoy) beat our expectations, at 55% of our/consensus full-year forecast, driven by a stronger-than-projected revenue delivery and upbeat shipbuilding margins. A strong orderbook of US$22.4b as of end-1H26, together with good pricing levels of contracts secured, provides good revenue/earnings visibility for YZJ through 2029. Management is confident about meeting its 2026 contract win target of US$4.5b. Maintain BUY with a higher target price of S$5.30 based on a conservative 9.1x 2028F PE.
Market Spotlight
- US stocks were lower on Monday, with all indices falling as the real estate, utilities and information technology sectors fell. There were more decliners than advancers on both the NYSE and NASDAQ.
- The FSSTI rose 59.44 points to 5,698.43, supported by strength in SIA and DBS, with both mid- and small-cap indices rising with a broad market advance on a S$2.63b turnover.
Technical Analysis
AEM Holdings (AEM SP)
- Trading Buy Range: S$9.01-9.02
Venture Corp (VMS SP)
- Trading Buy Range: S$16.83-16.84
Key Indices
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