Singapore banks' shares may be near the end of their rally as
their first-quarter results represent a short-term top and
business activity is expected to cool off in the coming
quarters, said Macquarie Equities Research.
"We believe the rally in Singapore bank stocks is looking
tired and we would look to pare down holdings at current
levels," Macquarie said in a report.
"We believe that upcoming quarters may look weaker for all,
given slowing business activity (we assume) lack of major
investment banking deals vs 1Q13," Macquarie said, adding that
the sector as whole is trading close to fair value, and lacks
operational catalysts to the upside.
It downgraded DBS Group Holdings Ltd and UOB Ltd
to "neutral" from "outperform", and cut its rating on
Oversea-Chinese Banking Corp Ltd to "underperform"
from "neutral".
Banking shares have outperformed so far this year, with DBS
rising 17 percent, OCBC up 15 percent and UOB gaining 11
percent. Singapore's benchmark Straits Times Index has
gained 9 percent. Singapore's leading banks beat market
forecasts with their earnings.