Top 5 Singapore stocks to watch in November 2021

Analysts say these five Singapore stocks are among the ones to watch this month. Here are their insights.

These five Singapore-listed equities are among analysts' most recommended to trade for the month of November 2021, based on their latest ratings, price targets and research.

1. DBS Group (SGX: D05)

2. Oversea-Chinese Banking Corporation (SGX: O39)

3. Singapore Airlines (SGX: C6L)

4. United Overseas Bank (SGX: U11)

5. Singtel (SGX: Z74)

DBS Group (SGX: D05)

DBS Group reported a 31% year-on-year increase in net profit to S$1.7 billion for third-quarter 2021, beating Refinitiv analysts’ average estimates of S$1.57 billion.

IG analyst Yeap Jun Rong said that the double-digit growth ‘may have come from a lower base last year, as DBS was building up its loan loss reserves for the whole of 2020’.

The higher profit also ‘comes as asset quality has remained resilient thus far’, Yeap added.

Non-performing assets declined slightly by 0.8% from the previous quarter, while non-performing ratio came in at 1.5%, which he noted is ‘healthy’, in-line with both OCBC and UOB.

The Board also declared a quarterly dividend of S$0.33 per share for the third quarter, bringing the dividend for the nine months to S$0.84 a share.

Trading sentiment among analysts remained mostly positive on DBS Group as of late October, with 14 ‘buy’ calls, seven ‘hold’, and no ‘sell’ recommendations. Their target prices averaged S$33.55, according to Bloomberg data.

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Oversea-Chinese Banking Corporation (SGX: O39)

Oversea-Chinese Banking Corporation (OCBC) reported that group net profit for the third quarter of 2021 rose 19% to S$1.22 billion from S$1.03 billion in the same quarter a year ago.

This beat Bloomberg analyst estimates of S$1.19 billion.

The bank said this was driven by resilient business growth and lower allowances as the credit outlook continued to improve.

Net interest income grew 3%, underpinned by a 4% increase in average loan volumes, partly offset by a 2 basis points decline in net interest margin.

Out of 22 analysts rating the stock late last month, 17 suggested ‘buy’, five said ‘hold’, while none gave ‘sell’ calls on the OCBC counter. Bloomberg data showed that their average target price stood at S$13.92.

UOB analysts rated OCBC shares a ‘buy’ on 22 October with a target price of S$15.65, stating that their earnings forecast for 2021 remains largely unchanged.

Singapore Airlines (SGX: C6L)

Among 12 analysts covering Singapore Airlines (SIA) shares, only one suggested ‘buy’, seven recommended ‘hold’, while four gave ‘sell’ ratings, according to Bloomberg data in late-October.

Their average target price was S$4.66, which implied a potential downside of 10.7% based on the airline’s latest stock price of S$5.22.

JPMorgan upgraded its rating on SIA to ‘neutral’, alongside a S$5.20 target.

Bloomberg Intelligence (BI) estimated that the group’s revenue may recover by up to 26% of pre-pandemic levels given Singapore’s extended quarantine-free travel scheme for vaccinated arrivals.

The Republic’s vaccinated travel lanes (VTLs) provide a blueprint for border reopenings worldwide, with intra-Asia routes possibly offering greater traffic upside, BI added.

‘Australia, Japan, China and India could join by 1Q 2022 as their Delta variant outbreaks come under control, potentially restoring another 66% of Singapore Airlines' 2019 passenger capacity,’ BI wrote.

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United Overseas Bank (SGX: U11)

United Overseas Bank (UOB) saw its net profit for its latest quarter soar 57% year-on-year to S$1.05 billion.

This came in above analysts’ earlier estimates of S$982.4 million.

The group said this was achieved on the back of healthy loan growth and sustained fee income, as well as lower credit allowance.

Following the earnings, Maybank analysts reiterated a ‘buy’ rating on the bank’s stocks, while raising their price target from S$29.34 to S$31.15 a share.

They noted that UOB’s digital investments could see it gaining market share in the regional mass premium customer segment and drive higher risk adjusted returns.

The stock currently has a consensus rating of ‘outperform’ and average price target of S$30.57, based on the latest SGX StockFacts data.

Singtel (SGX: Z74)

Singapore Telecommunications (Singtel) shares are up 1.6% in the last one month, and 8.2% on a year-to-date basis.

Out of 19 analysts, 17 recently recommended ‘buy’ on Singtel shares, two suggested ‘hold’, and none gave ‘sell’ calls, Bloomberg data showed.

Their average target price was S$2.97, implying potential upside of 18.8% based on the stock’s latest price of S$2.50 as of 03 November 2021.

CIMB’s research team, which rated Singtel an ‘add’ with a S$2.90 target price, recently highlighted that digital banking may be a value creator for Singtel in the long run, even though it may not be highly profitable in the first five years.

Meanwhile, UOB analysts added Singtel to its ‘Alpha Picks’ list, stating that they like the group’s Australia tower asset monetisation plans. They maintained a ‘buy’ call on the stock alongside a target price of S$2.75.

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