DBS Group Research’s Lim Rui Wen is of the opinion that Singapore bank stocks are likely to see a rerating, given the expected rate hike cycle from the US Federal Reserve.

He has maintained a buy call on both UOB and OCBC, with target prices of $31 and $14 respectively. 

In a Dec 1 note, Lim says that DBS economists now expect rate hikes to be delivered earlier, with two rate hikes in 2H22 if economic momentum is maintained, and an additional two rate hikes in early 2023, with potential upside risks. 

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