4 STI shares attracting investment from institutional investors: OCBC; UOB; DBS; Unique

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Institutional investors are usually large investors, such as fund managers, sovereign wealth funds, and insurance companies. Unlike retail investors who invest their own money, institutional investors invest on behalf of others.

It is worth observing what institutional investors are doing, as the companies they choose to invest in or exit from their position can be seen as a sign that they have identified value propositions or challenges that cause them to adjust their position. Although institutional investors are not always right, it is fair to say that their investment decisions are carefully considered because they are held accountable by the people on whose behalf they invest.

In this week’s edition of 4 Stocks This Week, we take a look at 4 companies from the Straits Times Index (STI) that have received the most net institutional inflows in 2022 so far.

Note that the information used in this article was taken from SGX Market Update. You can read their full review here.

OCBC (SGX:O39)

From February 3-7, 2022, OCBC (SGX: O39) recorded a net institutional contribution of $124 million. This brings their institutional net inflows for the year to $520 million, which is about 0.9% of their current market capitalization.

Since the start of 2022, OCBC’s stock price has risen about 17% and is now trading at $13.33. The bank, which has been hit by an unfortunate increase in phishing scams over the past two months, will release its fiscal 2021 results on February 23.

UOB (SGX: U11)

UOB (SGX: U11) recorded institutional net inflow of $116 million from February 3-7, bringing total institutional net inflow for the year to $356 million, or approximately 0.7% of its current market capitalization of approximately $53 billion.

Since the beginning of the year, the price of UOB shares has increased by approximately 21%, from $26.93 to $32.60 currently. This follows a very strong 2021 when the stock gave investors a total return of 24%.

Big news for UOB investors is last month’s major announcement that UOB will acquire Citigroup’s consumer businesses in Indonesia, Malaysia, Thailand and Vietnam for approximately $4.915 billion. Excluding one-time transaction costs, UOB believes the acquisition should be immediately accretive to UOB’s earnings per share (EPS) and return on equity (ROE).

UOB will announce its FY2021 results later this week on February 16.

DBS (SGX: D05)

DBS (SGX:D05) stock price has been in freefall since the start of the pandemic, trading at around $18 for a short time ($18.16 on March 20, 2020). After fetching around $25 at the end of 2020, it generated a total return of 35% in 2021, which is even more impressive considering that it is already the company with the largest market capitalization at the moment. Singapore Stock Exchange. For 2022, stock prices are up about 13%. It is now trading at $37.25.

From February 3-7, 2022, institutional net inflows for DBS were $104 million with year-to-date inflows of $309 million, or approximately 0.3% of the company’s market capitalization.

Earlier this week, MAS imposed an additional capital requirement on DBS following the widespread unavailability of DBS’s digital banking services from November 23-25, 2021. MAS now requires DBS to apply a 1.5x multiplier to its assets risk-weighted for operational risk. This translates to an additional approximately S$930 million in regulatory capital (based on published financial statements as of September 30, 2021) that will be required for DBS.

Single Phone (SGX: Z74)

Singtel’s (SGX: Z74) performance has been a disappointment for investors over the past five years as the company has seen its share price, net profit and dividend decline.

Once considered a stable and defensive blue-chip company capable of withstanding crises due to the nature of its business, Singtel took a hit to both revenue and profit when global travel came to a halt, leading to a decline revenue from its roaming and prepaid mobile phone business. This resulted in a lower interim ordinary dividend from 6.8 cents per share in 2020, to 5.1 cents in 2021 and 4.5 cents in 2022.

Fortunately, the company appears to have done better in 1H2022, with its net profit more than doubling to $954 million. Institutional net inflows for Singtel in 2022 currently stand at $233 million and share prices are up around 9% so far in 2022. The stock is currently trading at $2.55.

Read also : 4 blue-chip stocks looking to recover from the pandemic

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4 stocks this week is not a recommendation by us to buy or sell any of these stocks. For investors eager to learn more, you should continue to educate yourself about them before making your investment decisions.


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