Recently, UOB held its Corporate Day to share about banking in the digital era. The group shared several initiatives for both consumers and small and medium-sized enterprises (SME). On the consumer front, Mighty is aimed at increasing engagement with clients, and also offers search, book and rating services for dining. On the SME front, its BizSmart package aims to simplify banking for its SME customers. This is in line with the current global trend to increase engagement with clients via multiple platforms and solutions.

With the regional economic softness, banking stocks have taken a hit in recent months, and UOB was also not spared as its stock price took a hit and has fallen 4.5% YTD. In the last five months, the stock traded within a narrow band of S$17.40 to S$19.20. Based on current market trend and the lack of near term price drivers, we do not expect the stock to be able to break above the current technical trading range.

On the fundamental side, we have a medium term HOLD rating on the stock with a fair value estimate of S$19.61.  

Source: OCBC Research - 20 Sept 2016