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Oversea-Chinese Banking Corp (OCBC) has been ranked the strongest bank in the world by Bloomberg, based on figures compiled by the leading financial news and data services provider.
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Also in Mar 2011, Citibank in its latest Asean banks report, titled Top Guns and Dark Horses, which focuses on stocks to watch in Indonesia, Malaysia, Singapore and Thailand.
The top guns represent its mainstream country picks, while the 'dark horses' are projected to deliver superior returns versus their country peers over the next five years, irrespective of present or future market shocks.
Citibank singles out OCBC as Singapore's 'top gun' for the next five years.
Apart from looking back at the last five years to see which Asean banks delivered the best shareholder returns over the period of December 2005 to December 2010, the report also provides a 12-month view of the present.
Over the past five years, Indonesia was the best banks sector in Asean to own, given superior profit economics and strong book-value growth.
In Singapore, OCBC delivered the best five-year total returns, with a five-year compound annual growth rate (CAGR) of 8.1 per cent, a three-year CAGR of 6 per cent, and an 8.6 per cent one-year return.
Its share price rose 48 per cent over the 2005-2010 period, making it the top-performing bank in Singapore.
The report also states that OCBC was the most defensive going into the 2008/2009 crisis and the best performer coming out.
Citibank singles out OCBC as Singapore's 'top gun' for the next five years.
DBS was picked as Citibank's 'dark horse' in Singapore. The Asean 'dark horses' share some characteristics: strong and liquid balance sheets for growth but generally sub-par return on assets (ROA) and return on equities (ROE).
Valuations of the 'dark horses' are also said to have stemmed from the fact that investors have yet to be convinced by management changes or new strategies, perhaps in part due to their less-than-impressive track records in showing improving growth and profitability. The report predicts that some critical execution risks - such as a transformational acquisition - may be key to realising their full potential.
The key themes emerging in Asean banks at present include a growing sense of investment and business lending recovery, and that central bank policy rates will be broadly higher by the end of the year.
However, the report highlighted that Singapore is the key exception, where efforts to combat inflation by strengthening the Singapore dollar (SGD) could keep short-term rates low. Citibank's projections for the next five years see Indonesia and its big-cap banks being once again the top-performing market in Asean.
After Indonesia, however, the report forecasts the possibility of Thailand overtaking Malaysia as the next best performing of the four Asean markets.
This is asssuming sustained domestic capex recovery plus superior net interest margins (NIMs) in Thailand, while Malaysian big caps take a riskier regional route for growth.
The report states that Singapore remains challenged largely due to three reasons: low profit economics, capital ratio constraints enforced by a conservative regulator, and an even greater need to execute on regional growth to deliver superior returns.
However, Citibank notes that Singapore may outperform its peers during periods of inflation and oil shocks, thereby remaining the most defensive market.
The Citibank report also cautioned that the extraordinary returns of 2005-2010 may be hard to repeat in the next five years.
http://www.asiaone.com/Business/News/My+Money/Story/A1Story20110318-268820.html
,
Also in Mar 2011, Citibank in its latest Asean banks report, titled Top Guns and Dark Horses, which focuses on stocks to watch in Indonesia, Malaysia, Singapore and Thailand.
The top guns represent its mainstream country picks, while the 'dark horses' are projected to deliver superior returns versus their country peers over the next five years, irrespective of present or future market shocks.
Citibank singles out OCBC as Singapore's 'top gun' for the next five years.
Apart from looking back at the last five years to see which Asean banks delivered the best shareholder returns over the period of December 2005 to December 2010, the report also provides a 12-month view of the present.
Over the past five years, Indonesia was the best banks sector in Asean to own, given superior profit economics and strong book-value growth.
In Singapore, OCBC delivered the best five-year total returns, with a five-year compound annual growth rate (CAGR) of 8.1 per cent, a three-year CAGR of 6 per cent, and an 8.6 per cent one-year return.
Its share price rose 48 per cent over the 2005-2010 period, making it the top-performing bank in Singapore.
The report also states that OCBC was the most defensive going into the 2008/2009 crisis and the best performer coming out.
Citibank singles out OCBC as Singapore's 'top gun' for the next five years.
DBS was picked as Citibank's 'dark horse' in Singapore. The Asean 'dark horses' share some characteristics: strong and liquid balance sheets for growth but generally sub-par return on assets (ROA) and return on equities (ROE).
Valuations of the 'dark horses' are also said to have stemmed from the fact that investors have yet to be convinced by management changes or new strategies, perhaps in part due to their less-than-impressive track records in showing improving growth and profitability. The report predicts that some critical execution risks - such as a transformational acquisition - may be key to realising their full potential.
The key themes emerging in Asean banks at present include a growing sense of investment and business lending recovery, and that central bank policy rates will be broadly higher by the end of the year.
However, the report highlighted that Singapore is the key exception, where efforts to combat inflation by strengthening the Singapore dollar (SGD) could keep short-term rates low. Citibank's projections for the next five years see Indonesia and its big-cap banks being once again the top-performing market in Asean.
After Indonesia, however, the report forecasts the possibility of Thailand overtaking Malaysia as the next best performing of the four Asean markets.
This is asssuming sustained domestic capex recovery plus superior net interest margins (NIMs) in Thailand, while Malaysian big caps take a riskier regional route for growth.
The report states that Singapore remains challenged largely due to three reasons: low profit economics, capital ratio constraints enforced by a conservative regulator, and an even greater need to execute on regional growth to deliver superior returns.
However, Citibank notes that Singapore may outperform its peers during periods of inflation and oil shocks, thereby remaining the most defensive market.
The Citibank report also cautioned that the extraordinary returns of 2005-2010 may be hard to repeat in the next five years.
http://www.asiaone.com/Business/News/My+Money/Story/A1Story20110318-268820.html
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