Not surprising, the latest news in Singapore is on the potential dividend cut from the 3 local banks, DBS, OCBC and UOB. Please note that Singapore is lagging behind in this as all EU banks are not allowed to pay dividends or stock buybacks and US banks has some restrictions but the big US banks have cleared those requirements though apart from Wells Fargo.
DIVIDEND cuts by Singapore banks may happen "as early as" the upcoming payout to be announced in the second quarter, with the regulator reviewing banks’ capital plans amid prolonged economic uncertainty, said DBS Group Research in a report this week.
The Monetary Authority of Singapore (MAS) said last Thursday it is in close discussions with banks on their capital management ahead, which would include conversations around - though not limited to - restricting dividend payouts. Banks "should start early and not wait until the capital position starts looking weaker", MAS managing director Ravi Menon had told reporters.
Source: Singapore Business Times
Looking at the intraday effect on the 3 banks, all 3 banks have dropped more than 2% (DBS at -3%, UOB at -2.6%, OCBC at -3.48%).
Let's take a look at the daily and weekly chart of DBS and it has crossed over to the 100MA and touching the 38.2% Fibonacci. Will need to monitor if the support will be at the 38.2% mark.
Looking at the weekly chart, it is now at the end the big green bar of week of 1 June so we will need to see if it closes below that today ($19.54) taking into consideration that Friday is a public holiday in Singapore so its a shorter week.
* I do not own any DBS shares currently.
DBS Daily as of 11am HKT
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