DBS bank is the largest company in Singapore with a current market capitalisation of $84 billion. With rising interest rates, net interest income spiked and DBS booked a record FY22 net profit of $8 billion. With this eye-popping profit, DBS has announced an upcoming April dividend of 42c + 50c of special dividend. Forecasting another 3 quarters of 42c dividend, the FY23 dividend yield is projected at 6.7% at the current price of $32.7 (a high yield % that is commonly only seen with Reits)
From the long term chart, we can see that DBS has recovered strongly from the 2020 Mar lows from Covid, and is currently sitting at the support levels of $32+. Another strong support would be around $30, which is also a psychological price support. Resistance level would be around $36+ (3 year highs)
Taking a closer look at the short term chart, we can see that the weekly stochastic oscillator has turned to the oversold regions currently. If share prices recover from $32.7, it will form a bullish divergence.
The recent negative news on the collapse of SVB and Silvergate USA banks have sparked fears of contagion, and invoked shadows of the Global Financial Crisis triggered by Lehman bank bankruptcy. So far, USA and UK government have stepped up quickly to protect depositor funds.
Will this be a good time to pickup this solid DBS bank, or there be further selling? Pls let me know in your comments below :)
*Disclosure: I am currently vested in DBS
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