To The Moon

Hi Tigers🐯,

Recently, the $Straits Times Index(STI.SI)$ has risen for 10 consecutive days, repeatedly hitting new all-time highs. Based on Singapore's market top-gainers list, Inside the top 5 gainers YTD 2026, 3 are bank stocks: $OCBC Bank(O39.SI)$ (+47.36%); $DBS(D05.SI)$ (+33.11%); $UOB(U11.SI)$ (+30.49%); the other 2 winners are $SGX(S68.SI)$ (+41.71%) and $Wilmar Intl(F34.SI)$ (+29.64%).

Today we're seeing that @Macquarie Warrants Singapore shared their take on Singapore bank stocks — DBS just crossed S$200B in market cap, MQ has upgraded DBS and UOB to Outperform (joining OCBC), and they're calling for SORA to climb ~71bps over the next 12 months.

🎯 Key Takeaways

• Local banks surged to all-time highs this month, outperforming the STI by a wide margin

• $DBS(D05.SI)$ crossed S$200 billion in market cap for the first time

• Call warrants on the trio rank among top 10 gainers month-to-date, moving 9-20x the underlying shares

• Put warrants on the trio also sit among top losers, down as much as 87%

• Macquarie Research upgrades $DBS(D05.SI)$ and $UOB(U11.SI)$ to Outperform, joining $OCBC Bank(O39.SI)$

🐯And welcome to join the rewarding session🐯

• Are you holding any Singapore bank stocks?

• What's your take on Q2 earnings for the big three?

• Are you riding it out or thinking of taking profit?

• How's your return looking so far this year?

Please drop a comment or share your positions below 👇

🎁We'll reward quality comments with 10–50 Tiger Coins, based on depth, data, and visuals (charts/screenshots welcome!)

Welcomet to read the full breakdown in the image below 👇 (Review Link>>)

📊 2Q26 Earnings Preview

• MQ sits ahead of consensus for all three banks into 2Q26 results

• Sees scope for fee income beats and possible further upside from contained provisions

• Anticipates 4% YoY growth in both pre-provision operating profit and net profit

• MQ tracking 3-4% ahead of Visible Alpha consensus, led by fee income running 6% ahead

• Macro backdrop has improved versus end-1Q26, with scope for credit charges near the low end of guidance

Some other data you may interested in：

• 1H26 returns: OCBC +28.2% (wealth fees +24%, insurance +34%), DBS +19.3%, UOB +15.0%. NIM compression continues, but fee income and loan growth are offsetting.

• Rates outlook: Short-term SGD rates stabilizing; deposit repricing should help NIM bottom out in Q2. DBS sees NIM decline easing, with OCBC/UOB showing q-o-q improvement potential.

• Q2 earnings watch: NII trajectory, fee resilience (wealth/trading), credit costs (UOB real estate exposure elevated), and capital return plans (DBS S$0.15/qtr capital return; OCBC 50% payout guidance).

• ETF flows: 15 consecutive months of inflows, cumulative S$1.2B since Mar 2025; STI ETF AUM at S$4.7B.

Bottom line: Banks are carrying the STI to record highs despite NIM headwinds. Q2 focus is on whether fee income and stabilizing rates can sustain momentum as earnings season begins.

💹 SORA & Rates Outlook

• SORA outlook turning more bullish as USD strength and US Fed hikes feed through to SGD rates

• Gap between SORA (SGD) and SOFR (USD) could narrow modestly near-term

• MQ projects ~71bps of SGD rate increases from 2Q26 lows over the next 12 months

• Rate path seen reaching 1.77% over that horizon

🏦 Loan Growth & Sector Trends

• MQ continues to project mid-single-digit loan growth for the banks

• Total loan growth hit 9% YoY as of May 2026, excluding financial institutions loans

• Working capital utilisation has picked up since the Middle East conflict began in March

• Banks hold 44-60% of loan portfolios in Singapore; DBS most exposed, OCBC least

• ASEAN banks tour commentary upbeat, with ongoing wealth momentum and UOB outlining performance plans

• Cross-border securities trade risk to onshore China brokers seen as manageable; no asset quality concerns flagged

💰 Dividends & Capital Management

• $OCBC Bank(O39.SI)$ and $UOB(U11.SI)$ expected to pay out around 50% of 1H26 earnings

• $DBS(D05.SI)$ 'quarterly dividend pre-calibrated to 81 cents/share (66 cents ordinary + 15 cents capital return)

• Medium term, capital management options are rising

• MQ estimates current payouts support 7-10% loan growth

⬆️ Ratings & Target Prices

• $DBS(D05.SI)$ and $UOB(U11.SI)$ upgraded to Outperform from Neutral, joining OCBC

• Revised pecking order: $UOB(U11.SI)$ > $OCBC Bank(O39.SI)$ > $DBS(D05.SI)$

• 2026-28 EPS estimates raised by an average of 1%/6%/7%, led by the revised rate path

• Growth assumptions in valuation models lifted to 2.5-3.0% from 1%

• Target prices raised 24% on average: DBS $70.86, OCBC $27.76, UOB $45.16

⚖️ Trending Warrants

• Macquarie has listed new put warrants over all three banks this morning

• Trending warrants priced $0.067-$0.250, moving ~6x the bank shares based on effective gearing as of 9AM today

• Selection based on gearing, liquidity, sensitivity and tighter bid-ask spreads

Disclaimer：This viewpoint is sourced from Macquarie Warrants Singapore and does not represent the recommendation of Tiger Brokers. Past performance does not guarantee future returns. Investing involves risk — please conduct thorough research before making any trade.