Crisis? What crisis? UOB share price tore apart the form book by going on an explosive run following the release of an excellent set of first half results. Many investors and analysts were also stunned by the news that 70% of new launch condominium, The Tre Ver, was sold during Phase 1.
The Tre Ver was developed by UOL, an affiliated company of UOB. Previously, many investors feared the worst for UOB share price following the introduction of new property cooling measures by Singapore government.
The buoyant first half results certainly set UOB share price on fire, making it the most expensive bank stock in Singapore. Within the span of a week, UOB share price surged from $27 to $28 level. On the basis of the current bull form of UOB share price, shareholders should have that feel good feeling.
However, I do think that investors are throwing caution to the wind as the surge in UOB share price may not be justified. To put things into perspective, UOB is still struggling with toxic loans as a result of the exposure to the ailing oil and gas industry. As of June 2018, non-performing loans stood at $4.2 billion (1.7%), a significant increase from last year’s $3.5 billion (1.5%). In this regard, is the current UOB share price a value trap or value buy?
In this article, I would share my views on why UOB share price is consistently been traded at higher level than DBS share price, despite the former being Singapore’s smallest lender. I would also analyse whether big boys are targeting this counter currently and if UOB shares are worth investing.
UOB share price on red hot form
It seems that nothing can stop the property market now. However, it may be too early to pop the champagne because it is still early days since the implementation of the new property curbs. Notwithstanding this, recent positive property news had been encouraging for UOB share price as the bank has a significant exposure to local home loans and the building and construction industry.
Unlike DBS and OCBC, UOB share price is considered [This is a premium article. The rest of the content is blocked and can be accessible by SG Wealth Builder Members only. To read the full content, please sign up as member.]
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