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The Week Ahead: Can UOB Outshine OCBC?

Oversea-Chinese Banking Corporation (SGX: O39) has delighted with market-beating results. But can United Overseas Bank (SGX: U11) do the same? There are high hopes that it could.

In July, UOB posted a 5.5% rise in second-quarter net profits. It also said profits for the first six months by 5.5% to S$1.7 billion. That was driven in part by a 12% improvement in net interest income, while fees and commission income rose 9%.

The improvement in the bank’s net interest margin should not be underestimated. At the same time, exposure to the still-troubling oil and gas sector should not be overlooked either.

StarHub (SGX: CC3) will also be in the spotlight next week. In August, Singapore’s second-biggest telecom operator posted a 1% drop in second-quarter revenues. But net profits slumped by more than a fifth. Revenues at Pay TV fell almost 8% as its subscriber base shrank by 10,000 to 477,000.

Other companies with results include Hutchison Port Holdings (SGX: NS8U), Sembcorp Industries (SGX: U96) and Ascendas REIT (SGX: A17U).

On the economic front, the next chair of the US Federal Reserve could be announced as early as next week. The talk on the street is that it could be Jerome Powell, who is reckoned to be a bit of a dove. In other words, hikes in interest rates under his watch could be gradual.

Staying with interest-rate talk, the Fed has a decision to make about the cost of borrowing. The consensus is that the rates will be left unchanged in November, while the balance sheet will continue to be reduced. Put another way gradual monetary tightening.

The Non-Farm Payroll numbers for September were a bit of a shock. Rather than 90,000 jobs being created, it actually fell by 30,000. The number for October is expected to more than make up for the loss in the previous month, though.

China will have some Purchasing Managers Indices for bean counters to crunch. Both the manufacturing and services indices are expected to be above 50, which are supposed to show expansion. Expansion is good, contraction is bad.

The Bank of England will announce its latest interest-rate decision. In September, the rate-setting committee voted by seven to two to keep rates at a record low of 0.25%. This time, it could increase the Bank Rate by 0.25% to 0.5%, though it is not exactly a done deal.

And finally, Singapore will release bank lending for October. This is expected to show that lending continues to be robust.

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice.The Motley Fool Singapore has recommended shares of United Overseas Bank Ltd and DBS Group. Motley Fool Singapore Director David Kuo doesn’t own shares in any companies mentioned.