The Week Ahead: Can DBS And OUB Deliver Again?

The earnings season continues apace with banks the main focus next week.

In February DBS Group (SGX: D05) said it will pay $1.20 per share in dividends from 2018 onwards. It said the higher pay out was because the Basel reforms that have been finalised would not have much impact on the bank. We will also find out if Singapore’s biggest lender can outperform again?

United Overseas Bank (SGX: U11) posted a 16% jump in fourth-quarter earnings in a February. This was thanks to an increase in net interest income, fee commission and net trading income. However, operating expenses and expenses were higher. Much is expected from Singapore’s smallest bank.

It was a tale of two countries for CapitaLand (SGX: C31) in the fourth quarter. Revenue fell 35% because of lower completion and handover of development projects in China. But there were higher contributions from Singapore. With property in focus, a lot rests on the shoulders of CapitaLand.

Sembcorp Industries (SGX: U96) was hurt by a poor performance at its marine rig business in the last quarter. Things may not be much better this time, after Sembcorp Marine (SGX: S51) posted an 86% slump in first-quarter profits.

Telecom operator StarHub (SGX: CC3) reported a 74% drop in fourth-quarter net profits in February. Turnover inched ahead by 2.2%. But higher expenses undid the good work on the top line.

On the economic front, the Federal Reserve will announce its latest interest-rate decision. No change is expected this time. That said, almost all officials agreed that a gradual tightening remains appropriate. The drop in first-quarter GDP is unlikley to change their minds.

The Bank of England will also announce its latest interest-rate decision. The jury is out as to whether the UK central bank will pull the trigger on another rate rise. In theory it should, given that inflation clocked in at 2.5%, and interest rates are at 0.5%.

It’s time for those closely-watched China PMI numbers again. In March, the they were all above the key 50-points mark. However, the Caixin Manufacturing PMI was the weakest reading since November last year.

The market will get its first look at how quickly the Eurozone grew in the first quarter. In the final three months of 2017, it grew 2.7%. The Eurozone will also announce the unemployment rate for March and the inflation rate for April.

And finally, its time for those Singapore bank-lending numbers again. In February, Singapore banks lent S$650.9 billion, which was slightly more than the previous month. They might have lent a bit more again in March. So watch how the three Singapore banks, namely, DBS Group, OUB and Oversea-Chinese Banking Corporation (SGX: O39) react to the news.

The Motley Fool’s purpose is to help the world invest, better. Click here now for your FREE subscription to Take Stock - Singapore, The Motley Fool’s free investing newsletter. Written by David Kuo, Take Stock - Singapore tells you exactly what’s happening in today’s markets, and shows how you can GROW your wealth in the years ahead.

Like us on Facebook to keep up to date with our latest news and articles. The Motley Fool’s purpose is to help the world invest, better.

The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore Director David Kuo owns shares in DBS and UOB.