OCBC ups DBS target to $17.80 from $16.00; keeps buy

OCBC Investment Research has raised its target price on DBS (DBSM.SI), Southeast Asia’s largest bank, to $17.80 from $16.00 and maintained its buy rating.

OCBC has raised its 2011 net earnings estimate for DBS to S$2.98 billion from $2.85 million, to account for a more stable net interest margin.

 

DBS posted second quarter net profit of $735 million, against a net loss of $300 million a year earlier.

 

The brokerage reported that DBS’s Hong Kong operation is expected to continue growing and its results are reflective of the bank’s strategy to use Hong Kong as a base for its Greater China operations.

 

“While the uncertainty in the global market is likely to persist, we are of the view that it should not significantly impact DBS’s earnings in Singapore and Hong Kong,” OCBC said in a statement.

 

At 10:10 a.m., DBS shares were up 0.9% at $15.47. The stock has risen about 8% since the start of the year. (The Edge Singapore)