OCBC share price: Where next as it commits to growing headcount?
Shares of Oversea-Chinese Banking Corporation opened lower on Monday, despite plans to hire 3,000 more employees in 2020.
Shares of Oversea-Chinese Banking Corporation (OCBC) Group opened 1.3% lower as the market reopened on Monday 15 June 2020, amid growing concerns over a second wave of Covid-19 infections.
Singapore’s second largest money lender saw its share price slide even more later in the day, dropping a further 1.4% to S$8.94 a share – its lowest level in two weeks.
OCBC to hire 3,000 Singapore workers for the rest of 2020
Still, the drop for OCBC was less pronounced than that of UOB and DBS, with the company announcing in a press release that it is planning to hire more than 3,000 people in Singapore this year.
OCBC said this was to provide more employment opportunities to both experienced professionals and fresh graduates amid the current economic and employment uncertainty.
This announcement also follows an earlier pledge in March 2020 that the group will not retrench any of its 30,000 employees worldwide as a result of the pandemic.
Of the 3,000 new jobs, more than 2,100 are full-time roles across various entities of the OCBC Group, such as OCBC Bank and its wholly-owned subsidiaries Bank of Singapore and OCBC Securities Pte Ltd, as well as its 88%-owned insurance arm, Great Eastern Holdings.
The roles to be filled are in areas such as wealth management, corporate banking, risk management, data analytics, operations and technology.
The 2,100 new full-time positions represent about 19% of the group’s current Singapore headcount of about 11,000 employees.
The remaining 900 roles are a combination of traineeship and internship positions.
'Market remains in contemplation' on price surge: analyst
As IG Asia market strategist Pan Jingyi wrote in her latest client note, a risk-off mood has carried over into Asia this week, despite the Wall Street retracement that had taken place on Friday.
‘The market remains in contemplation as to whether prices had overran with the initial reopening optimism after last week’s dip post the recent surge in prices,’ Pan wrote, adding that new cases recorded in Beijing and various states across the US were also fuelling fresh concerns among investors.
As at 16:00 SGT on Monday, Singapore’s blue-chip barometer Straits Times Index is down roughly 2.5% from Friday’s closing price.
OCBC’s share price soared 15% at the start of June
In the last one month, OCBC – like most other equities – has experienced a massive rebound in share price, as investor sentiments became increasingly optimistic on the back of Covid-19 lockdown easing around the world, as well as here in Singapore.
Singapore entered a so-called ‘phase one’ of its lockdown easing on 02 June 2020, under which firms in the manufacturing and services sector, among others, were allowed to resume operations.
Following that, OCBC’s share price soared nearly 15% to a three-month high of S$9.86 on 10 June 2020.
Prices have retraced since, but remain lifted by at least 2.5% from May 2020’s average range of between S$8.50 to S$9.05 a share.
OCBC average share price target: S$8.84
For now, the government has indicated that it will move into a ‘phase two’ if community transmission rates stay low and stable over the subsequent few weeks, and foreign worker infection rates – where the bulk of cases have been reported – are kept under control.
Earlier this month, Singapore’s three main banks – namely OCBC, alongside DBS and United Overseas Bank – saw their stock prices increase as much as average of 11%, as countries globally began to map out their economic recovery plans.
As of 15 June 2020, OCBC has received a consensus 12-month share price target of S$8.84 from five analysts, based on reports dating back a month.
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