Friday, March 13, 2015


DBS: Prime beneficiary of rise in interest rates. The implied Swap Offer Rate (SOR) spiked up by 32bp to 0.74% in Dec 14 and by 17bp to 0.86% in Feb 15. The 3-month Singapore Interbank Offered Rate (SIBOR) moved up in tandem by 21bp in January and 10bp in February to 0.77%.

Management guided loan growth of 8% for 2015. Although loan growth has moderated, DBS is in a unique position to benefit from the rise in interest rates due to its overwhelming advantage in having a low cost of funds in Singapore dollars.

UOB Kay Hian maintains BUY with TP of $23.55.

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