DBS: While the economic slowdown in China and its devalued currency could impact the region via slower growth, Nomura believes DBS’s share price correction in recent weeks is overdone, because its earnings should benefit from rising interest rates and relatively stable credit costs.
At 1.0x forward book, Nomura believes the stock offers a good entry point. House expects increasing US interest rates to propel local interest rates and this should lead to higher ROEs, a strong catalyst for re-rating.
Nomura has a Buy rating with TP of $24.30, which implies 37% upside from the current share price.
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