To The Moon

DBS has become the first Singapore-listed company to cross S$200 billion in market value.

Shares of $DBS(D05.SI)$ hit a record high of S$70.80 on July 13 and closed at S$70.79. The stock is now up around 26% this year, supported by strong earnings expectations, wealth management growth and attractive shareholder returns.

• 👏 Congratulations to @ookezy , who bought DBS early and is now sitting on a profit of S$39,668!

• 👏 Congratulations to @ephemeral.k , who bought DBS early and is now sitting on a profit of S$57,691!

Why Is DBS Rallying?

The interest-rate outlook has become more supportive. Investors were previously worried that lower rates would hurt banks’ net interest margins. However, expectations have recently shifted. Macquarie believes Singapore-dollar rates could support improving net interest income. Banks usually trade ahead of future earnings. The recent rally suggests investors are betting that pressure on margins may be easing.

Wealth management is becoming a major growth engine. DBS reported first-quarter net profit of S$2.93 billion, up 1% year over year, while total income reached a record high. Strong wealth management fees were one of the main drivers.

Loan growth and asset quality remain healthy. Singapore’s loan growth has stayed relatively solid, while a moderate-rate environment could support both lending income and credit quality. Rates remain high enough to support margins, but not so high that they cause a sharp increase in bad loans.

DBS remains an attractive income stock. DBS currently pays a quarterly ordinary dividend of S$0.66 per share, plus a capital-return dividend of S$0.15. That brings the total quarterly payout to S$0.81, or around S$3.24 on an annualised basis. At a share price of roughly S$70.80, that represents an estimated dividend yield of about 4.5%. Stable earnings and strong dividends have made DBS a core holding for long-term and income-focused investors.

Can DBS Keep Rising?

The next major catalyst is DBS’s second-quarter earnings on August 6. If net interest income improves, wealth management fees remain strong and management gives upbeat guidance, the stock could have further room to run.

However, expectations are already high. Macquarie raised its DBS target price from S$52.38 to S$70.86, while Citi lifted its target from S$65 to S$73.50 and maintained a Buy rating.

The key numbers to watch will be net interest margin, loan growth, wealth management income and future capital returns.

What do you think? Can DBS keep rising, or is the good news already priced in?

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