DBS Group Holdings share in bloodbath with Hin Leong

In March 2020, DBS announced a staggering pay check of $12.1 million to CEO Piyush Gupta for leading the bank to the Promised Land – DBS’ total income had more than doubled, net profit has tripled, and market capitalisation had nearly doubled in FY2019. However, almost half of his annual salary was in the form of the company’s share plan. Thus, the upheaval of DBS Group Holdings share price in recent months must have left a bitter taste in CEO Piyush Gupta’s mouth.

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Previously, the supreme form of DBS Group Holdings share price was largely due its strong financial results, which was fuelled by its aggressive loan growth strategy. With $362 billion gross loans, DBS is the largest lender in Singapore. In comparison, UOB holds $269 billion while OCBC holds $264 billion of loans.

DBS Group Holdings share price

For sure, CEO Piyush likes to put his money where his mouth is. In 2016, he bought $2.8 million of DBS shares at the peak of the oil crisis. At that point of time, he was confident that DBS Group Holdings share price was undervalued. Time flies. 2020 saw oil price plunged into negative territory while COVID-19 virus brings the global economy into a complete standstill. The market chaos led to a bloodbath for DBS Group Holdings share price.

Singapore has the world largest bunkering port due to it’ strategic geographical location. So the collapse of Hin Leong is unlikely to cause major disruption to the country’ oil trading hub ecosystem. But the downfall of the homegrown oil trader could be a harbinger of things to come for DBS Group Holdings share price as the unprecedented negative oil price came at a time when the menacing COVID-19 razed global consumers’ demands to the ground. Will DBS Group Holdings share price survive this crazy storm?

Year-to-date, DBS Group Holdings share price had fallen a whopping 27%. But if investors looked back, during the 2014 oil crisis, DBS Group Holdings share price had collapsed 36% to reach a bottom of $13.60. Interestingly, in 2016, CEO Piyush Gupta had bought the company shares at around this price range ($13.88). But even more shocking was that from the day he bought DBS shares, this counter keep flying to hit a record $30 in April 2018.

Note that this is an opinion article and not meant to be a financial advice. Please do your due diligence or engage financial advisors before investing in the stock market. Furthermore, I am not vested and have never invested in DBS Group share before. Whether DBS Group share price will surge or collapse has no impact on me. Thus, this article is not meant to induce readers to make any form of investment decisions.

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DBS Group Holdings share price assassinated

While it is unknown if DBS CEO Gupta will buy his company shares again, the month of March 2020 saw one of the biggest equity sell-offs against bank stocks in recent years. As the biggest lender in Singapore, DBS bank became the target board among short-sellers. In March 2020, DBS Group Holdings share price crashed following the exit of institutional funds, which net sold $879 million worth of DBS stocks. This made DBS stock the heaviest net sold counter by fund houses in March.

Short-selling on DBS Group Holdings share hit a peak of 12.9 million in the week of 9 March 2020. The short-selling attacks, coupled with the exit of the institutional investors, caused DBS Group Holdings share price to [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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Updated: July 14, 2020 — 4:06 pm

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