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Bank On Some Profits With UOB
Tradeable, Tradeable Ideas | 09 May 2014
Related stocks:
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By: Lim Si Jie
Articles (169) Profile
  1. UOB won the top honor of Best Retail Bank in Asia Pacific at The Asian Banker Excellence in Retail Financial Services Awards 2014.
  2. UOB made a record full-year profit of $3.01 billion last year, the first time it managed to cross $3 billion in earnings. UOB recorded a year-on-year increase in assets under management from $66 billion to $75 billion.
  3. Chart indicators are suggesting that UOB will continue in its upward trend in the long run.

There seems to be a lot of developments happening around UOB since the beginning of the year.

Corporate Developments

  1. United Overseas Bank Ltd. (UOB) won the top honor of Best Retail Bank in Asia Pacific at The Asian Banker Excellence in Retail Financial Services Awards 2014. The Asian Banker said UOB had distinguished itself through its outstanding retail business performance and customer-focused approach.
  2. In my opinion, to be able to clinch the Best Retail Bank in Asia Pacific is a very strong indication of UOB’s strength in its core business. This is especially so when UOB is competing with regional banks that are equally outstanding in the Asia Pacific region.

  3. Annual Report 2013: Net interest income and fee income reached new highs. So did regional profit, which now contributes 39 per cent of UOB earnings. The bank made a record full-year profit of $3.01 billion last year, the first time it managed to cross $3 billion in earnings.
  4. In 2013, UOB recorded a year-on-year increase in assets under management from $66 billion to $75 billion. Its regional wealth management footprint also increased from 29 wealth management centers in 2010 to 48 centers in 2013.

    This includes the opening of UOB’s 11th Privilege Banking Center in China and its fourth Wealth Banking Center in Singapore.

    As a bank, wealth management is one of its core businesses as well. UOB managed to increase their assets under management as well as expanding their wealth management network over the past three years.

  5. United Overseas Bank Ltd set up a foreign exchange (FX) advisory and trading unit dedicated to small businesses in Southeast Asia, as more of them seek advice on FX hedging. UOB continues to be bullish in the SME (small and medium enterprises) space, posting double-digit growth in the SME segment in 2013.
  6. United Overseas Bank (UOB) is on the lookout for the right opportunities although they are not in a hurry to snap up banks. UOB chief executive Wee Ee Cheong assured their shareholders at its annual general meeting that its regionalisation strategy is on track.
  7. While focusing on its core businesses, UOB is also looking to expand its network into newer regions to increase their sources of income.

Technical Analysis

UOB share price has been riding on an upward trend since March 2014. It was in March when UOB’s 20 day exponential moving average (EMA) crossed its 50 day EMA, signalling that an upward trend is about to emerge.

From the chart, we can see that UOB is likely to continue its upward trend as its EMA does not show any signs of turning in the opposite direction.

This is further supported by the positive MACD that is showing signs that it will continue to be in the positive region. The ADX is also pointing to a strong positive trend for UOB.

#Bullish
UOB represents a business that most investors would love to get a piece of, i.e. a business that is growing in strength in its core business, while actively sourcing for new opportunities to break into new regions to expand its operations.

Thus, I am very optimistic and confident to go for a bullish call on UOB in the long term.

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Si Jie is no stranger to investing having started his journey at a young age. He is heavily influenced by acclaimed investors such as Benjamin Graham, Peter Lynch, and John Rothchild.

Please click here for more information about this author.

United Overseas Bank  25.700 -0.16 -0.62%   
Business: [FY18 Turnover] Group retail (43.3%), group wholesale (43.2%), global markets & investment management (5.1%), others (8.4%).

Insight: May-19, 1Q19 total income rose 7.8% to $2.4b due t... Read More


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