Like many countries, Singapore is struggling with the impact of the coronavirus. But given that it is a city-state of 6 million people with a well-organized, effective government, it is well positioned to cope with all of this better than most, notes Carl Delfeld, editor of Cabot Global Stocks Explorer.
It is also important to note that over the past decade, wealth is piling up faster in Singapore than anywhere in the world. Assets under management in the city-state have jumped an amazing 1,120% since 2000 and are on track to overtake Switzerland, according to the research firm WealthInsight.
It boggles the mind that a country one-fifth the size of Rhode Island can eclipse London, New York, Shanghai, and Zurich.
A pure play on this emerging trend is the "J.P. Morgan" of Singapore: the Development Bank of Singapore (DBSDY) — better known as DBS.
DBS is one of the largest banks in Southeast Asia with a presence in 18 markets. It is headquartered in Singapore, with its main listing on the Singapore Stock Exchange, and is the largest constituent of the Singapore Straits Times Index (STI).
The Government of Singapore established DBS in July 1968 and its largest and controlling shareholder is Temasek Holdings, which is one of two large sovereign wealth funds controlled by the Government of Singapore.
DBS has a growing presence in the three key Asian areas of growth, which it defines as Greater China, Southeast Asia, and South Asia, meaning India. It is the largest and strongest bank in Southeast Asia and the leading consumer bank in both Hong Kong and Singapore.
Its tentacles reach out through 200 branches in 50 cities. DBS produces steady profit margins, revenue, and earnings and is also increasing market share in consumer and corporate banking. Wealth management is also a strategic priority and a growing part of its business.
Why buy DBS right now? The stock has come back from a 52-week high of 93 to trade just below 50, its lowest share price since 2016.
Yes, it has deferred (not cut) its dividend until it is able to have its annual meeting but this is already priced in. In short, this is an opportune time to tuck this quality bank into your portfolio.
