SINGAPORE (Feb 26): Wee Ee Cheong, CEO of United Overseas Bank, is the embodiment of a conservative banker and not at all given to displays of giddy optimism. Yet, even he is sounding positive these days. “We are starting 2018 with a blue sky,” he said, during UOB’s results briefing on Feb 14.
Buoyed by record earnings and higher dividends, shares in UOB as well as DBS Group Holdings and Oversea-Chinese Banking Corp have soared to all-time highs recently. Yet, many analysts are maintaining their bullish calls and upgrading their price targets for these stocks. This is in stark contrast to 18 months ago, when these stocks were trading barely above book value and the market was panicking about rising provisions for bad loans to the beleaguered oil and gas (O&G) sector.
Has the banking sector really turned the corner? Or, is another spate of defaults about to spook analysts and investors again? Is the O&G sector getting any better?