Are UOB shares worth buying?

Analysts remain bullish on the stock, which is down 5.5% in the last one month.

  • United Overseas Bank (SGX: U11) share price closed 1.3% lower on Wednesday (08 September 2021)
  • The bank's shares rallied to a week high of S $ 25.81 this week
  • Its overseas subsidiaries UOB China and UOB Indonesia have secured yuan and rupiah cross-currency dealership licenses
  • The stock has a potential 16% upside, according to the latest analyst price targets
  • Keen to trade UOB shares? Open an account with us to start trading the stock.

Why did UOB stock price climb this week?

UOB shares rallied as much as 1.3% this week, after its Chinese and Indonesian units secured cross-currency licenses.

Singapore's third largest bank said on Monday that its wholly-owned subsidiaries UOB China and UOB Indonesia have secured licenses to be appointed cross-currency dealers (ACCD) for the Chinese yuan (CNY) and Indonesian rupiah (IDR).

This makes UOB the first Singapore bank to hold the CNY/IDR ACCD status in both markets. UOB China is also the only Singapore-headquartered bank approved by the People's Bank of China (PBC) to be a CNY/IDR direct market maker.

The licenses will allow UOB China and UOB Indonesia to open offshore accounts in rupiah and yuan respectively, as well as offer cross-currency exchange, financing, swaps and forwards in the currency pair to its corporate and institutional clients in the two markets.

UOB's Indonesia- and China-based clients will also have direct access to onshore yuan-rupiah foreign exchange rates and liquidity to hedge their trade transactions and investments, the company stated.

UOB China can also offer two-way quotes on the yuan against the rupiah in the interbank FX markets.

What are analysts saying about UOB?

CIMB analysts maintained an 'add' rating and target price of S $ 29 on UOB shares, after reiterating a 'neutral' call on the Singapore banking sector.

They wrote that the impact of the dividend cap removal by the Monetary Authority of Singapore has 'played out'.

MAS has also 'removed the segregation of system statistical data by DBU and ACU, paving the path towards more robust and complete disclosures', the analysts added.

Meanwhile, an earlier-than-expected Fed rate hike could be a key re-rating catalyst for the sector.

Finally, they noted that 'UOB's approach to impairments has been more measured compared to its peers over FY2020'. As a result, they believe that year-on-year earnings growth across FY2021 will likely be relatively modest, albeit stable.

Across the board, the stock has a consensus rating of 'outperform' and target price of S $ 29.61, based on the latest analyst data published by SGX StockFacts.

The target price represents a potential 16.3% upside from its closing price of S $ 25.46 on Wednesday.

Thinking of trading UOB shares?

Go long or short with CFDs on 16,000+ shares with our award-winning platform.* Perfect your technique with S $ 200,000 worth of virtual funds in your free demo account. Create a free demo account here .

* Based on the Investment Trends 2018 Singapore CFD & FX Report based on a survey of over 4,500 traders and investors. Awarded the Best Online Trading Platform by Influential Brands in 2020. Awarded the best retail FX provider for Asia by FX Markets in 2020

IGA, may distribute information/research produced by its respective foreign affiliates within the IG Group of companies pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the research is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, IGA accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact IGA at 6390 5118 for matters arising from, or in connection with the information distributed.

The information/research herein is prepared by IG Asia Pte Ltd (IGA) and its foreign affiliated companies (collectively known as the IG Group) and is intended for general circulation only. It does not take into account the specific investment objectives, financial situation, or particular needs of any particular person. You should take into account your specific investment objectives, financial situation, and particular needs before making a commitment to trade, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit.

Please see important Research Disclaimer.

Live prices on most popular markets

  • Forex
  • Shares
  • Indices

Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.


Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 20 mins.

The Momentum Report

Get the week’s momentum report sent directly to your inbox every Monday for FREE. The Week Ahead gives you a full calendar of upcoming key events to monitor in the coming week, as well as commentary and insight from our expert analysts on the major indices to watch.

For more info on how we might use your data, see our privacy notice and access policy and privacy webpage.

You might be interested in…

Find out what charges your trades could incur with our transparent fee structure.

Discover why so many clients choose us, and what makes us a world-leading provider of CFDs.

Stay on top of upcoming market-moving events with our customisable economic calendar.