What's next for OCBC shares?

• Oversea-Chinese Banking Corp Ltd (SGX: O39) share price hit an intraday high of S$11.35 on Thursday (7 July 2022)
• The bank’s market capitalisation is down by 5% in the last one month
• Analysts envision a 22.3% upside potential for the stock in the next 12 months
• Keen to trade OCBC shares? Open an account with us to start today.

OCBC stock price: what’s the latest?

Oversea-Chinese Banking Corporation (OCBC) shares rallied to a day’s high of S$11.35, after opening lower on Thursday.

Singapore’s second largest bank, along with Standard Chartered Bank, announced the completion of its 30-year Singapore Overnight Average Rate (SORA)-based overnight indexed swap (OIS) derivatives transaction.

This is the second longest transacted SORA OIS in history, the Business Times reported.

‘The successful transaction of the 30-year derivatives that reference SORA is yet another milestone in Singapore’s SOR-to-SORA transition and paves the way for more longer-tenor trades in coming months,’ the banks said in a joint statement.

OCBC shares have fallen by approximately 5% in the last one month, amid rising inflation and interest rate uncertainties.

How do analysts view OCBC shares?

In terms of outlook, the blue-chip counter has an average rating of around ‘outperform’, alongside an average share price target of S$13.88 (based on the most updated SGX StockFacts data).

The price target equates to a 22.3% upside potential from OCBC’s last traded stock price of S$11.35.

The latest investment notes came from Commerce International Merchant Bankers (CIMB) and United Overseas Bank Ltd (UOB) analysts, who have rated the stock ‘add’ and ‘buy’ respectively.

CIMB’s equity researchers gave OCBC shares a price target of S$14.20 on 30 June 2022, stating that they expect Singapore banks’ Q2 FY2022 earnings to remain weighed down by market volatility amid macroeconomic headwinds.

They predicted that OCBC’s net profit will increase 15% year-on-year to S$1.3 billion for the second quarter.

Meanwhile, UOB lowered their price target on OCBC shares to S$14.95 from S$15.05, citing that net interest margin will expand by six basis-points (bps) to 1.61% in 2022 and 27 bps to 1.88% in 2023.

The analysts also forecasted earnings growth of 11% in 2023 and 6.1% in 2024.

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