Chart of the Day: Why Singapore banks may struggle with weaker business soon

Lack of major investment banking deals loom.

According to Macquarie Research, they believe the rally in Singapore bank stocks is looking tired and we would look to pare down holdings at current levels.

The solid top line numbers of 1Q13 may represent a short-term top for profitability, as business activity may cool off and margins remain under pressure in Singapore in upcoming quarters.

Here's more from Macquarie Research:

The stocks are not egregiously expensive but they are trading at levels that we perceive to be slightly above fair value. This implies limited upside risk in light of our overtly bearish house strategy call on Singapore.

In our view, 1Q13 was an extremely solid quarter for DBS, and a good quarter for UOB. We were less impressed with OCBC’s results given the weakening pre-provisioning operating profit.

In any case, we believe that upcoming quarters may look weaker for all, given slowing business activity and (we assume) lack of major investment banking deals vs 1Q13.

We thus expect a repetition of the pattern of 2012, which had a strong early start with earnings momentum slowing in 2Q-4Q13.

If you've been wondering whether SBR could work for your company — yes, probably.

A lot of the companies we partner with started as readers. They'd been following our coverage for a while, saw their own customers and competitors in it, and eventually asked the obvious question: could we do something with you? The answer is usually yes. The shape of it depends on what you're trying to do.

The options are broader than most people assume — thought leadership articles, sponsored content, industry summits across Southeast Asia, regional awards programmes, podcasts, and media placements in print and digital. Some partners use one channel; most use a mix. We figure out the right combination by starting with your brief, not with our rate card.

So if the question has been on your mind, here's the easy way to ask it.

We'll tell you honestly whether we can help, and how. It's a better use of everyone's time.

Book a meeting

| Or download the media kit (PDF)

240,000 senior readers quarterly in print Top 1,700 Singapore companies reached

7 markets across Southeast Asia