Buoyant shares of S'pore banks lift STI to 1-year high

Investors expect many more months of high interest rates that boost bank profits

- Chor Khieng Yuit

Shares of the three local banks have been on a roll this week as investors flocked to a sector buoyed by the prospect of many more months of high interest rates.

The banking rally has also been lifting the Straits Times Index, given the lenders have an outsized weighting in the local share market benchmark.

DBS Bank, UOB and OCBC Bank all hit fresh one-year highs on July 3 and built on that on July 4 with DBS closing up 0.05 per cent at $37.98, while UOB added 0.93 per cent to $32.57 and OCBC put on 1.14 per cent to $15.15.

They are now up around 5 per cent over the past five days, but it's the year-to-date rises that are more striking: DBS is ahead 25.6 per cent from Jan 1, while UOB is around 14.3 per cent higher and OCBC, 17.3 per cent higher.

The STI has benefited as well, advancing 2.9 per cent over the past five days, and 6.2 per cent so far this year to a one-year high of 3,439.88 on July 4.