Market News & Analysis


Top Story

United Overseas Bank (UOB.SP): Profit Dragged by Provisions, Shares Stabilize

United Overseas Bank (UOB.SP), a major bank in Singapore, announced that 1Q net income declined 18.7% on year to S$855 million, better than market expectations of S$792 million.

However, this is the Bank's first quarterly profit drop since 2016.

The Bank said an Impairment Charge of S$286 million (up from S$93 million in the prior-year period) was tied to "the challenging macro environment this quarter". Major banks in Singapore are writing up large provisions against non-performing loans amid economic impacts caused by the coronavirus pandemic


1Q net interest income edged up 0.4% on year to S$1.59 billion, as the net interest margin shrank to 1.71% (5 basis points lower on quarter, 8 basis points lower on year) amid declining interest rates in major economies.

On a Daily Chart, UOB is showing signs of stabilization from the market crash in March.


Source: GAIN Capital, TradingView


It has formed a Bullish Pattern of Higher Highs and Lows since marking a recent low (closing low) at S$17.57 on March 23.

The stock has returned to levels around the 20-day moving average, while encountering Overhead Resistance at S$20.70 (around the 50-day moving average).

Above S$20.70, further resistance will be found at S$22.38 (last seen in March).

Only a return to the Key Support at S$18.60 would call for a Bearish Reversal.

Disclaimer

This report is intended for general circulation only. It should not be construed as a recommendation, or an offer (or solicitation of an offer) to buy or sell any financial products. The information provided does not take into account your specific investment objectives, financial situation or particular needs. Before you act on any recommendation that may be contained in this report, independent advice ought to be sought from a financial adviser regarding the suitability of the investment product, taking into account your specific investment objectives, financial situation or particular needs.

GAIN Capital Singapore Pte. Ltd., may distribute reports produced by its respective foreign entities or affiliates within the GAIN Capital group of companies or third parties pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the report is distributed to a person in Singapore who is not an accredited investor, expert investor or an institutional investor (as defined in the Securities Futures Act), GAIN Capital Singapore Pte. Ltd. accepts legal responsibility to such persons for the contents of the report only to the extent required by law. Singapore recipients should contact GAIN Capital Singapore Pte. Ltd. at 6826 9988 for matters arising from, or in connection with the report.

In the case of all other recipients of this report, to the extent permitted by applicable laws and regulations neither GAIN Capital Singapore Pte. Ltd. nor its associated companies will be responsible or liable for any loss or damage incurred arising out of, or in connection with, any use of the information contained in this report and all such liability is hereby expressly disclaimed. No representation or warranty is made, express or implied, that the content of this report is complete or accurate.

GAIN Capital Singapore Pte. Ltd. is not under any obligation to update this report.

Trading CFDs and FX on margin carries a high level of risk that may not be suitable for some investors. Consider your investment objectives, level of experience, financial resources, risk appetite and other relevant circumstances carefully. The possibility exists that you could lose some or all of your investments, including your initial deposits. If in doubt, please seek independent expert advice. Visit cityindex.com.sg for the complete Risk Disclosure Statement.

Important Notice:

Cryptocurrencies are not legal tender currency and trading of derivatives on Cryptocurrencies are currently not covered under any regulatory regime in Singapore. Consequently, investors should be aware they do not have protection under the Securities and Futures Act (Cap. 289). Please ensure that you are fully aware of the risks.