UOB Kay Han has raised its recommendations for DBS Group Holdings (SGX:D05) and Oversea-Chinese Banking Corp. (OCBC) (SGX:O39) to hold and buy, respectively, as the US' changing stance on tariffs somewhat benefits short-term trading, The Edge Singapore reported Monday.
The equity research firm previously had a sell rating on DBS and a hold on OCBC, the report said.
Yields of US' long-term government bonds rose by about 50 basis points on average as foreign investors rebelled against the US' "flip-flopping trade policy," the report quoted UOB Kay Hian analyst Jonathan Koh as saying.
However, Koh said the banks' dividend payouts are at risk due to weaker economic growth prospects, according to the report.
The analyst still forecasts a dividend per share of SG$1 for OCBC and SG$0.60 for DBS, although these could change if economic concerns worsen, the report said.
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