Noting the management’s view of a bottoming local residential market, Lee highlights that while the Singapore Property Price Index recorded its 15th quarter of decline for the June quarter, it is also the slow pace of quarterly decline in the past few years.
In particular, the analyst has singled out UOB’s Wealth Management unit as a “clear winner” in the latest quarter after having posted a 24% y-o-y and 7% q-o-q increase in contribution to $136 million, the largest contributor to the bank’s fee and commission income for the quarter.
“While cost and some technology-related expenses are likely to go up, we expect the cross-selling of more products in its key markets to provide organic growth for its Wealth unit,” says Lee.
“At current price, we believe that any benefits from a potential hike in interest rate later in the year have already been priced in and will turn buyers of the stock at $22.00 or lower.”
Update: Shares in UOB closed 6 cents at $23.99 on Monday.
