OCBC: Upgrade to Hold Premium to peers is warranted

Upgrade to Hold. That OCBC's YTD share price performance has lagged its peers' is unjustified, we believe, given its strong risk management capabilities, growing wealth management franchise, much improved CASA-gathering capabilities and relative shelter from any correction in the property market. We do feel that valuations are still a little rich at this stage but a premium to peers is deserved. Our TP is raised to SGD8.00 from SGD7.50, on a higher P/BV multiple of 1.2x (1.1x previously) to reflect the stronger fundamentals.
 

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Source: Maybank - Kim Eng Research - 12 April 2012