Nomura downgraded Singapore banks to ‘neutral’ from ‘bullish’, saying the lenders are likely to see slower earnings per share growth going into the 2013 fiscal year, with emerging macro headwinds and continuing net interest margin pressure.
“While valuations are not excessive, the sector is likely toperform at best in line with the market,” Nomura said. It expects Singapore’s benchmark Straits Times Index to consolidate below the 3,000 level due to weaker earnings and economic outlook.
Nomura dropped United Overseas Bank from its list of top picks. It said it preferred DBS Group Holdings due to the bank’s undemanding valuation and dividend yield.
On Friday, DBS shares were down 0.4% at $14.16, UOB gave up 0.7% at $18.60, while Oversea-Chinese Banking Corp lost 0.9% at $9.29. The STI was 0.3% lower at 3,051.62 points.
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