CGS CIMB |
OCBC SECURITIES |
Banks A second chance
■ Banks are trading close to P/BV trough levels of Feb 2016, when the 6-year valuation de-rating cycle started to unwind. ■ We believe banks are much safer now vs. when they entered past economic slowdowns, despite 2018 share prices implying an NPL ratio rise of 9.3% pts. ■ Prudence has an estimated value of 6%. Asset quality impact on future net profit growth (21-27% of 2020F) should be cushioned by higher provisioning. ■ Monetary easing is a potential share price trigger, especially as policymakers are now sounding more in favour of monetary easing, in our view.
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Singapore Residential Sector: A first dip since 2Q17
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Check out our compilation of Target Prices