DBS (technical)

DBS: UOB Kay Hian has Technical Buy Call. House note that SG banks are well capitalised and asset quality remains healthy. DBS has exhibited operational excellence and consistency in financial performance. Completion of the acquisition of Bank Danamon would increase DBS’ exposure to the high-growth emerging market. Its valuation is overly depressed with 2013F P/B at only 1.1x, the lowest among large commercial banks within ASEAN. House have a TP of $19.38, based on a 2013F P/B of 1.44x derived from a Gordon Growth model. Technically, prefer the stock to be supported at above $14.30/13.70 and the resistance levels to keep an eye on could be $15.00 and $16.00. Currently, price appears to have rebounded from $14.30.