Investing.com -- Morgan Stanley Asia EM Equity Strategy has added DBS Group Holdings (SGX:DBS) to its Asia Pacific excluding Japan focus list and removed United Overseas Bank (SGX:UOB).
The firm cited DBS Group Holdings’ more diversified and defensive geographical exposure as the reason for the addition. DBS has less exposure to ASEAN compared to UOB, making it relatively less exposed to potential sustained macro weakness in the region caused by oil prices at elevated levels.
Morgan Stanley’s HK/ASEAN Banks Analyst Nick Lord sees the underlying business model remaining strong. DBS has a good deposit franchise with strong and developing corporate and wealth franchises, and management is forward looking.
The team expects DBS to continue to generate surplus capital and return it to shareholders via a high ordinary payout, share buybacks and capital return dividends.
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