BNP Paribas upgrades OCBC (O39.SG) to Buy from Hold, raises target to $11.40 from $9.70, reckons “the stars are aligned for OCBC’s share price to be re-rated further.” 

Notes earlier concern over ING Asia Private Bank buy have dissipated, while 3Q results ”lend credence to our optimism as OCBC emerged as a clear-cut winner.” Says unlike peers which suffered from slowing loan momentum, margin contraction, “OCBC chalked up stronger and more broad-based loan traction plus sequentially stronger net interest margin.” 

 

Adds, unlike DBS (D05.SG), UOB (U11.SG), OCBC management sounds more upbeat, painting positive outlook for bank. At current levels, OCBC priced at 10% premium vs DBS, UOB, in terms of forward P/E; “we expect this premium pricing to widen given its more robust earnings outlook.” 

 

OCBC now house’s top sector pick, drops DBS, rated Buy, to bottom of pile. OCBC shares +0.2% at $9.87.