STOCKS NEWS SINGAPORE-UOB snaps 6-day decline
Shares in United Overseas Banking Ltd inched up, snapping a six-day losing streak, even as Citi downgraded its rating on the bank's stock, citing regional risks clouding its earnings outlook.
Citi downgraded its rating on UOB to "neutral" from "buy", but raised its target price on the stock to S$21.25 from S$20.30 after a recent price rally. UOB shares traded down 0.2 percent to S$20.80, headed for their longest losing streak in three months.
Singapore's banks may benefit as investors seek safety in the regional banking stocks, but the boost would be limited, it said.
"The earnings reality is that UOB has large onshore exposure to Asean markets with Thailand, Indonesia and Malaysia looking vulnerable to either slowing GDP, funding pressures, asset quality surprises or currency weakness," Citi said in a note.
UOB has risen more than 4 percent so far this year, overshadowed by the nearly 8 percent climb in DBS Group Holdings Ltd, southeast Asia's top lender, though it fared better than Oversea-Chinese Banking Corporation Ltd, which gained 3 percent.
Meanwhile, Citi applauded DBS's offshore trade finance-led strategy, which underpins its foothold in China, and called DBS its top pick in the banking sector.
Financial stocks inched up 0.2 percent, and the benchmark Straits Times Index was up 0.3 percent to 3,097.77 points, bouncing from a 2013 low of 3,054.77 hit in the previous session.
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