DBS (technical)

DBS: UOB Kay Hian note that DBS has benefitted from improved business sentiment with robust loan growth seen to continue into 1Q13. Market-sensitive sources of fee income have improved with more upbeat financial markets. Net trading income, which is typically stronger in the first quarter, is expected to improve in 1Q13 and NPL ratio and credit costs are already fairly low compared to historical trend. Maintain BUY and target price of $19.90, based on 1.55x P/B. Growth drivers include regional businesses and greater contribution from high-growth emerging markets if DBS successfully acquires Bank Danamon. Technically, the stock could trend higher for a break above $16.00 to test $16.80 should it be well supported at above $15.30.