Will DBS hit S$30 a share soon?

Singapore largest money lender has seen its share price rise steadily since launching a new digital exchange last week.

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  • DBS Group’s shares have risen roughly 2% since it announced a new digital exchange last week
  • The exchange includes a cryptocurrency trading platform, which launched earlier this week
  • Analysts recently raised their target prices on the stock, citing the group’s accelerated digital adoption as a key factor

DBS Group share price: what's the update?

DBS Group’s share price has increased as much as 2% since announcing the launch of a new digital exchange last Thursday (10 December 2020).

As at 15:30 SGT on Thursday (17 December), shares are trading at S$25.43 apiece.

DBS launches new digital exchange

Called the DBS Digital Exchange, DBS will leverage blockchain technology to provide an ecosystem for fundraising through asset tokenisation and secondary trading of digital assets including cryptocurrencies.

The digital exchange will provide security token offerings, a digital currency exchange and digital custody services.

The exchange will offer exchange services between four fiat currencies (SGD, USD, HKD, JPY), and four of the most established cryptocurrencies, namely Bitcoin, Ether, Bitcoin Cash and XRP.

The platform will serve as a members-only exchange for Institutional Investors and Accredited Investors.

The digital currency platform launched earlier this week on Tuesday (15 December). Meanwhile, the platform for security tokens is expected to launch in the first quarter of 2021.

Singapore Exchange (SGX) will take a 10% stake in the DBS Digital Exchange, with DBS holding a 90% stake. It will operate as a subsidiary of DBS Group.

‘Leveraging the power and strength of DBS Bank allows us to build volume, liquidity and scale in this exchange, in a manner other bespoke exchanges find difficult to do,’ DBS Group CEO Piyush Gupta said in a media briefing last week.

What are analysts’ latest take on the stock?

In terms of share price outlook, RHB analysts raised their target price from S$25.20 to S$30 a share on 10 December, with a ‘buy’ rating.

The analysts believe that DBS Group is on its way to a sustained return on equity (ROE) recovery in FY2020 and FY2021.

They added that DBS’ accelerated digital adoption - including the introduction of the digital exchange - also places it ahead of its peers.

Equally optimistic were UOB analysts, who kept a ‘buy’ rating on the stock and a target price of S$26.75 a share, stating that the new digital bank licensees will keep the three main banks ‘on their toes to sharpen their digital capabilities’.

Furthermore, the brokers believe that the existing players provide more ‘comprehensive services on an omni-channel basis, while new digital-only challenger banks are restricted to digital apps without face-to-face interactions’.

In terms of dividends, the analysts expect DBS to provide a payout of S$1.08 for 2021 and S$1.32 for 2022, representing dividend yields of 4.2% and 5.1% respectively.

How to trade DBS with IG

Are you feeling bullish or bearish on DBS Group’s stocks?

Either way you can buy (long) or sell (short) the asset using derivatives like CFDs offered on IG's industry-leading trading platform in a few easy steps:

  1. Create a live or demo IG Trading Account, or log in to your existing account
  2. Enter <DBS Group> in the search bar and select the instrument
  3. Choose your position size
  4. Click on ‘buy’ or ‘sell’ in the deal ticket
  5. Confirm the trade

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