DBS Group (D05.SG) off 0.6% at $14.00, volume paltry at 901,000 shares, reflecting limited participation across broad market; news yesterday bank sells asset management arm to Japan’s Nikko Asset Management in exchange for 7.25% stake in combined entity doing little to spur additional interest; RBS expects financial impact to be neutral over short run, “very modestly positive” over medium-, long-term. 

“We expect the immediate profit impact from this deal to be immaterial, as the sold units make an immaterial contribution to group bottom line and DBS will also not recognise any material gain on the disposal. 

 

Over the longer term the deal could be modestly positive to bottom line, primarily through commissions earned on the sale of Nikko AM’s products through DBS distribution channels.” Keeps Sell rating, $11.50 target; “the most important catalyst for the share would be the negative impact on earnings from continued low rates.”