- The interest rate downcycle has negative impact on Singapore banks’ NIM and net interest income. Downgrade Singapore banks to MARKET WEIGHT. Our top BUY is OCBC for its new dividend policy with payout ratio at 50%, focus on ASEAN and defensively low P/B of 1.06x.
The Fed paused rate hike for the third consecutive FOMC meeting on 13 Dec 23.
- - Read this at SGinvestors.io -
- The dovish bias can be seen from the downward shift in the dot plot by 50bp in 2004 and 30bp in 2025.
Not if but when.
- The FOMC has started to deliberate on the appropriate timing for rate cuts. Fed officials do not want to cause unintended harm to the economy by keeping interest rates too high for too long when inflation is falling.
- - Read this at SGinvestors.io -
Inflation has turned the corner.
- US core PCE inflation peaked at 5.6% in Feb 22, the fastest pace in 30 years. Core PCE inflation eased 1.9ppt y-o-y to 3.2% in Nov 23. Sequential momentum has also moderated to 0.1% m-o-m.
- Based on economic projections provided by FOMC members as of Dec 23, the US economy is expected to expand by 1.4% and core PCE inflation to recede to 2.4% in 2024, which reflect continued economic expansion and a likely soft landing.
COVID-19-induced supply-side distortions have normalised.
- Read more at SGinvestors.io.
Above is the excerpt from report by UOB Kay Hian Research.
Clients of UOB Kay Hian may be the first to access the full report in PDF @ https://www.utrade.com.sg/.
Jonathan KOH CFA UOB Kay Hian Research | https://research.uobkayhian.com/ 2024-01-03
More reports on banking & finance sector:
Analyst Reports on Singapore Banking & Finance Sector
Read also:
Analyst Reports on DBS Group
Analyst Reports on OCBC Bank
Analyst Reports on United Overseas Bank (UOB)
