InvestIdeas

SINGAPORE, May 8 (Reuters) - HSBC has downgraded its investment rating for DBS Group to "neutral" from "overweight" and cut its share target price to S$22.40 from S$28.00, citing higher earnings risk.

The shares closed on Wednesday at S$20.28.

"In view of the increasingly challenging macro environment and less predictable property market development in Singapore, it is doubtful how long strong loan growth can continue to support core operations," HSBC analysts said in a client note.

Not vested.

RESEARCH ALERT-Citi cuts DBS target price to S$20.85

SINGAPORE, Aug 8 (Reuters) - Citigroup kept its "buy" rating on Singapore's DBS Group but cut its target price to S$20.85 from S$22.35 as it expects the bank's 2008 earnings to be lower than previously expected.

"We cut 2008 estimates profit to S$2.5 billion from S$2.8 billion, roughly two-thirds due to lower Hong Kong profit expectations. We are more cautious on fees and provisions," said Citigroup analysts Robert Kong and Ivan K Lim.

DBS posted a 16 percent rise in quarterly profit on Wednesday, beating market expectations as it chalked up faster loan growth and trading income.

DBS CFO to be replaced
By CONRAD TAN

DBS Group chief financial officer Jeanette Wong will be replaced by head of group risk Chng Sok Hui in the first top executive reshuffle at the bank since Richard Stanley took over as chief executive.

Jeanette Wong, 48, will assume the role of group executive responsible for DBS's institutional banking group and international operations outside greater China
Ms Chng, 47, will take over as chief financial officer on Oct 1, said DBS in a filing to the stock exchange.

She has been at DBS for 25 years in various finance, corporate planning and risk management roles. Her last six years were spent as head of group risk.

Ms Wong, 48, will assume the role of group executive responsible for DBS's institutional banking group and international operations outside greater China.

Sep 18, 2008, The Straits Times
DBS High Notes investors at risk
Bank warns they may lose entire stake in Lehman-linked product
By Francis Chan

SOME local investors of a product linked to bankrupt investment giant Lehman Brothers have received late-night phone calls from DBS Bank warning them that their entire stake may be wiped out. The investors have their cash in a product called DBS High Notes 5 that the bank offered wealthier clients last year. It came with a promised annual return of about 5 per cent.

But Lehman's collapse on Monday means the product will be unwound and investors may only get a portion of their investment back - or none at all.

One 52-year-old customer told The Straits Times: 'I received a call from my relationship manager late Tuesday night. He told me that...my investment may amount to zero.' The man had invested $50,000 - savings he had earmarked for retirement.

A customer in her late 40s said: 'My relationship manager called and told me to be prepared to receive a letter from the bank...[it] would say something to the effect that my investments in products like High Notes 5 may be totally gone.' She invested $50,000 and US$30,000 (S$43,000) in two separate transactions.

Investors are mostly clients of DBS's priority banking unit, DBS Treasures.

The product - DBS High Notes 5 - is a 5-1/2 year structured product linked to eight underlying shares, including Goldman Sachs, Morgan Stanley, Merrill Lynch, Macquarie Bank and Lehman.

Customers who invested in Notes 5 said they were sold on the relatively high 5 per cent annual payout by DBS. But now they just want their money back. 'What we do not understand is: How can the fall of one bank cause our funds to just vanish when there are seven other stocks within the product that are still trading?' said a man whose elderly aunt invested $50,000 in DBS High Notes 5.

According to a person familiar with the matter, the largest single investment made on High Notes 5 was $2 million, although this could not be verified by DBS.

DBS confirmed that it took immediate action to notify customers once it learned of Lehman's chapter 11 bankruptcy filing.

'As soon as the news broke we immediately started communicating...to our retail investor customer base,' the bank said in an e-mail reply to The Straits Times. 'We are very concerned and understand the anxieties our customers face as they wonder what will become of their hard-earned money.'

DBS said the Lehman collapse has triggered a 'credit event' and the bank called for a redemption of the notes on Monday. It said unwinding of the product has begun and it will be at least 30 business days before clients learn of the final payout. But DBS also confirmed that investors in High Notes 5 may - 'in the worst-case scenario' - not get back their entire principal amount invested.

The product's prospectus also indicated that in a credit event such as bankruptcy, the notes 'will be terminated and the investor will receive zero payout'.

The bank said the product does not contain a guarantee that the principal will be protected. It also told The Straits Times it would 'fully investigate' claims by some customers that High Notes 5 was in fact sold on such a promise.

Meanwhile, UOB and OCBC Bank said that though some customers have invested in Lehman-linked products, the volume was 'modest' and 'negligible'. 'Since news of Lehman filing for Chapter 11 broke, we have taken a proactive approach in updating clients on the latest developments,' said UOB's spokesman.

OCBC's spokesman said in an e-mail that its securities unit has advised customers to wait for updates from Lehman.

DBS confirmed that it took immediate action to notify customers once it learned of Lehman's chapter 11 bankruptcy filing

Why not earlier?

Is it really that hard to see how Lehman's share price is falling?

HOPE is a good strategy??? Bury your head in the sand strategy??

How about its your money, not mine strategy???

DBS (NEUTRAL\S$16.92\Target S$18.80)
29 Sep 2008

got this from tinpeng.

DBS venture in India to shut branches, slash jobs

DBS Group – DBS’s joint venture in India, Cholamandalam DBS Finance, willclose more than a quarter of its branches because of a sharp slowdown indemand. A DBS spokesman said due to the decision by the Chola DBS board andmajor shareholders to focus more on vehicle finance, asset management, corporate lending and home equity, Chola DBS is closing 75 branches within its personal loans business.

The Times of India daily said yesterday that Chola DBS would shut 75 of its 260 branches and lay off up to 200 of its 1,800 staff. The newspaper quoted an e-mail message sent to staff by the company's managing director, Atul Pande, who said that the company faces 'unprecedented challenges'. The e-mail message - which the paper said it has a copy of - blames 'great turbulence' in the financial services industry and an economic slowdown for a drop in demand for personal loans.

DBS bought a 37.48%-stake in the financial services company in 2005. India's Murugappa Group holds another 37.48%. The rest is owned by public shareholders. DBS Group chief executive Richard Stanley said at the PBD Singapore international conference last week that the bank has 'very big' ambitions for its operations in India. DBS plans to have 10 branches andsome 500 staff in the country by year-end, he said

DJ MARKET TALK: DMG Cuts DBS Target To S$11.30; Keeps Neutral

0414 GMT [Dow Jones] STOCK CALL: DMG cuts target price for DBS (D05.SG) to S$11.30 from S$15.50, pegged at 0.8X 2009 book, to reflect higher risk profile given bank's aggressive loan expansion over past 3-4 years, dependence on non-interest income; "this loan growth aggressiveness will lead to higher risk in asset quality deterioration in the months ahead." Lowers FY08-09 earnings forecasts to account for expected slower fee, commission income, higher loan-loss provisions. Keeps Neutral call. Stock off 6.0% at S$10.90. (FKH)