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PHILLIP SECURITIES |
PHILLIP SECURITIES |
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Singapore Banking Monthly
Banks' share price surges
▪ December’s 3M-SORA was down 15bps MoM to 3.14%, the lowest since Jan 2023 and 15bps lower than the 4Q24 average. We expect the 3M-SORA to decline in tandem with the Fed Rate cuts of 100bps. Banks rallied 34% in 2024 from strong results, lowered rate cut expectations, and possibly higher dividends/share buybacks
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Zixin Group Holdings New source of revenue …. Waste
• Zixin is unveiling into a new revenue stream by converting agricultural waste into one of the feedstocks for animal feed. It has secured its first order valued at RMB 3.24mn (c. SGD 0.61mn) from a local chicken poultry breeder farm in Liancheng County.
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MAYBANK KIM ENG |
OCBC |
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Regional Plantations MPOB: Dec 2024’s stockpile lowest in 18 months
We advocate a short term trading strategy in 1Q25 Low brought forward 2024 stockpile, and early CNY and Ramadhan demand amid low output cycle in Q1 will keep CPO price lofty in the short term. 2024 ended the year with spot CPO price at MYR5,001/t, and averaged MYR4,180/t (2023: MYR3,810/t) for the year. Spot CPO price has averaged at MYR4,745/t in Jan 2025 to date. Meanwhile, prices of other major veg oils and crude oil have strengthened of late. We advocate taking a short term trading strategy in 1Q25 as the overall sentiment should also be lifted by the anticipated good results in the upcoming 4Q24 results release. Our preferred BUYs in the region are SDG, GENP and BAL.
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United Overseas Bank Ltd (UOB SP) - Share price hit new high
United Overseas Bank Ltd (UOB) posted better-than-expected 3Q24 results. Net profit grew 10% quarter-on-quarter (QoQ) and +11% year-on-year (YoY) to SGD1.6b. For the 9-month period, core net profit improved 3% YoY to SGD4.69b, with double-digit improvements from fee income and other income. It has successfully integrated Citigroup’s consumer businesses in Malaysia, Thailand and Indonesia. Its expanded operation is likely to open up more cross-selling opportunities in the future to drive fee income growth from the region. Management has guided for credit costs for FY24 to remain within its guidance of 25-30bps. Total assets under management (AUM) grew from SGD176b in 2023 to SGD185b by the end of 3Q24, up SGD9b or 5.1%. For 2025, management is guiding for high single-digit loan growth, double-digit fee growth and for the cost-to-income ratio to stay at around 41% to 42% (same as FY24). With its strong capital position, management is also exploring capital management initiatives. HOLD. |
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