On Dec 4, the Monetary Authority of Singapore (MAS) announced it had awarded two digital full bank (DFB) licences and two digital wholesale bank (DWB) licences. The two DFB licences were awarded to a consortium comprising Grab Holdings and Singapore Telecommunications (Grab/Singtel), and to Sea. And the two DWBs were awarded to a unit of Ant Group, and a consortium comprising Greenland Financial Holdings Group Co, Linklogis Hong Kong and Beijing Co-operative Equity Investment Fund Management Co.

“Of the winning bids, Grab/Singtel, Sea and Ant’s were unsurprising. The DFBs, with their ability to tap the retail segment, hold greater potential to disrupt the incumbent base, in our view,” says CLSA in a recent note.

CLSA is more positive on Singtel than Sea. “We are buyers of Singtel. However, these are related to nearer-term considerations and current valuations rather than anything related to the digibank offering in Singapore. For Sea, we initiate a small valuation for its digital financial services business but after another stellar run in share price, we downgrade our rating from Buy to Outperform as we see lower upside potential now,” the CLSA note adds.

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