DBS, OCBC, UOB Hit Record Highs as Institutions Pile In July 12

Singapore’s three largest banks hit record highs this week as institutional capital flooded the market. DBS breached S$70 for the first time on July 9, closing at S$70.45 by week’s end, up 5.7 per cent. OCBC and UOB also surged, gaining 8.46 per cent and 10.12 per cent respectively. The rally reflects investor bets on sustained higher interest rates and strong second-quarter earnings due in early August.

Why Singapore banks are rallying now

The US Federal Reserve’s pause on rate cuts in June 2026 has improved the outlook for bank margins. Higher interest rates widen the gap between what banks earn on loans and pay on deposits. Jayden Vantarakis, head of ASEAN equity research at Macquarie Capital, said the macro backdrop has improved relative to the end of the first quarter. Macquarie upgraded DBS and UOB to outperform, joining OCBC on the buy list.

Institutional money is flowing back to Singapore

Singapore equities attracted S$611 million in net institutional inflows in June, reversing more than 40 per cent of cumulative outflows from the prior five months. Financial services led with S$683 million in inflows. UOB received the largest individual inflow at about S$420 million, followed by OCBC at S$119 million and DBS at S$102 million.

Dividend yields and board-lot changes boost appeal

All three banks offer attractive dividend yields. DBS yields 4.43 per cent, OCBC 3.61 per cent, and UOB 4.08 per cent. On July 1, the Singapore Exchange cut the standard board-lot size from 100 units to 10 units for stocks priced between S$10 and S$100, lowering the entry cost for retail investors. Analysts expect strong wealth management momentum to continue supporting share prices.

What Meyka data shows on valuation

Meyka rates DBS a B- (neutral) with a 12-month forecast of S$71.33, suggesting limited upside from current levels. OCBC earns a B+ (buy) with a S$27.85 target, implying modest gains. UOB scores A- (buy) with a S$39.07 target, indicating downside risk. All three stocks show RSI above 80, signalling overbought conditions. DBS trades at a PE of 18.29, OCBC at 13.32, and UOB at 11.44, reflecting their relative valuations.

Final Thoughts

Singapore’s big three banks are trading near fair value after a sharp rally. While higher rates and dividend yields support the sector, overbought technicals and limited upside from Meyka forecasts suggest caution for new buyers. Income investors may find value; growth investors should wait for a pullback.

FAQs

Disclaimer:

The content shared by Meyka AI PTY LTD is solely for research and informational purposes.  Meyka is not a financial advisory service, and the information provided should not be considered investment or trading advice.