Business

Brokers' take

DBS GROUP HOLDINGS | ACCUMULATE

TARGET PRICE: $21.45

SEPT 18 CLOSE: $20.49

Phillip Securities Research, Sept 18

We had initially thought the positive sentiments and low volatility post-Trump's election will be temporary but as it appears, a sustained synchronous global recovery is gaining momentum.

Therefore, we could continue to see positive loan rates and volume dynamics in H2 2017 and early 2018 that will drive net interest income higher.

Even though DBS has the highest loan-to-deposit ratio, which gives it the least headroom to grow loans faster than deposits, it is our top pick because it has the highest Singapore current and savings account ratio to total deposits ratio of 91 per cent and the largest overall deposit base of $342.9 billion.

This means United Overseas Bank and OCBC Bank will not be able to lend as much cheap loans as DBS. We believe this is the competitive edge DBS has over its peers.

SATS | HOLD

TARGET PRICE: $5.05

SEPT 18 CLOSE: $4.75

OCBC Investment Research, Sept 18

With encouraging visitor arrivals to Singapore and strong traffic statistics at Changi Airport for January to July 2017, we believe Sats will benefit as a provider of gateway services and food solutions for close to 80 per cent of Changi Airport's traffic throughput.

That said, passenger yields remain weak for the airline industry, which translates to pressure on Sats' margins as its airline customers will likely engage in cost management efforts, especially for its low-cost carrier customers.

But, the changes Qantas will be making to its collaboration with Emirates will add capacity at Changi Airport and we expect these changes to be positive for traffic growth at Changi Airport.

RAFFLES MEDICAL GROUP | ADD

TARGET PRICE: $1.21

SEPT 18 CLOSE: $1.115

CIMB Research, Sept 17

Raffles Medical's share price has corrected about 27 per cent year-to-date.

We now think it looks more attractive in terms of risk-reward.

Upgrade from "reduce" to "add" with sum of parts-based target price of $1.21... Growing pains for new hospitals in China are inevitable, but a home-field advantage could help to offset near-term overseas weakness.

Disclaimer: All analyses, recommendations and other information herein are published for general information. Readers should not rely solely on the information published and should seek independent financial advice prior to making any investment decision. The publisher accepts no liability for any loss whatsoever arising from any use of the information published herein.

stock marketSINGAPORE EXCHANGEBusiness