- Singapore banks performed well with 5%-10% gains in Jan 26; we anticipate further legs in the rally as dividends and stable capital returns in S$ remain attractive. We continue to anticipate largely stable credit costs during 4Q25, although UOB’s credit costs are still expected to be elevated at 25- 30bps compared to peers.
- - Read this at SGinvestors.io -
- Increased deployment of the first batch of Equity Market Development Programme (EQDP) funds, alongside the fresh deployment of the second batch of funds, represents continued tailwinds for the sector.
S$ short-term rates bottoming out
- S$ short-term rates bottoming out and did not decline further even with Fed cuts; longer term rates face upward pressures. DBS economists continue to expect the 3M SORA OIS to rebound from lows of ~1.1% in early Dec 2025 to hold at ~1.25% through 1Q-4Q26.
- - Read this at SGinvestors.io -
- Longer term rates are under upward pressure as investors rethink the “sell America/rebalancing” trade.
A turning point in NIM downtrend.
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