In an earlier report on Aug 22, Maybank analyst Ng Li Hiang upgraded UOB to “buy” with a significantly higher target price of $26.40, from $20.80.
This was mainly due to UOB’s disciplined approach to its pricing strategy, sensitivity to re-pricing intervals, and lowest exposure to the oil and gas (O&G) sector among Singapore banks.
See: More visibility ahead for Singapore banks
Meanwhile, UOL has announced it is increasing its stake in UIC to 48.94%, from the current 44.71%, via a share swap deal with Wee-owned Haw Par Corporation.
Year-to-date, shares in UIC have risen 19.5% to close at $3.31 on Thursday.
“UOL continues to be the most liquid proxy to an impending rebound in Singapore property prices with the country accounting for almost 80% of its valuation,” Maybank analyst Derrick Heng says in a Friday report.
Maybank is keeping its “buy” call on UOL, which also remains the research house’s top pick in the Singapore real estate sector.
According to Heng, stocks in the property giant are trading at an attractive 26% discount to its revalued net asset valuation of $11.03, and at 0.8x P/BV.
“We believe UOL has been ahead of the curve in identifying the potential of the Bidadari area,” Heng adds. “Since then, land prices have moved up significantly and we believe it is in a very comfortable position for the eventual selling price due to its relative cost advantage.”
As at 4.46pm, shares in UOL are trading 8 cents lower at $8.05.
