Higher yield for T-bill on the way? When to buy more DBS and UOB shares? Or buy only OCBC shares?

Summary

In this video, AK discusses his financial strategies, focusing on applying for the upcoming T-bills auction to maintain his 'war chest' amidst market volatility. He anticipates higher yields due to spiking U.S. treasury rates and recent job creation data. AK also shares insights on Singaporean banks, particularly OCBC, DBS, and UOB, noting price movements and potential buying opportunities based on technical analysis. He emphasizes waiting for the right price to add to his investments, particularly in the banking sector, while continuing his T-bill ladder strategy.

Takeaways

• 🔔 Reminder to apply for the T-bill auction happening on Thursday, the 10th.
• 💼 Plans to maintain and strengthen the T-bill ladder, particularly with 6-month T-bills as a safe, risk-free investment for the 'war chest.'
• 📈 Expects the T-bill auction to have a slightly higher cutoff yield, potentially above 3%, driven by spiking U.S. Treasury yields.
• 📊 U.S. job creation surpassed expectations with over 200,000 jobs added, which led to higher Treasury yields and a decline in unemployment.
• 🤔 Uncertainty around future interest rate cuts by the Federal Reserve, with potential for either a 0.25% cut or no change in November.
• 🏦 Discusses local banks: OCBC, DBS, and UOB. Currently sees OCBC as more attractive based on valuation and weakening price.
• 📉 OCBC appears oversold, but cautions that oversold conditions can persist.
• 🛑 Notes long-term support levels for UOB and DBS at $28 and $30 per share, respectively, and mentions the possibility of double tops or pullbacks.
• 💡 Plans to wait for more favorable prices before adding to investments in UOB and DBS, potentially around $30 per share for UOB and $33 for DBS.
• 💭 The overall strategy is to maintain T-bill investments and wait for the right buying opportunities in local banks.

Q & A

What is the speaker reminding themselves about at the start of the transcript?

The speaker is reminding themselves to apply for a T-bill auction happening on Thursday, the 10th, for a 6-month Treasury Bill (TBS).

Why does the speaker believe T-bills are a good place to park money?

The speaker believes T-bills are a good place to park money because they are risk-free, volatility-free, and offer a reasonable yield. They serve as a 'war chest' while waiting for market conditions to improve.

What yield does the speaker expect for the upcoming T-bill auction?

The speaker expects the yield for the upcoming T-bill auction to be slightly above 3%, as the last round had a cut-off yield of 2.97%. This expectation is due to a recent spike in U.S. Treasury yields.

What has caused the spike in U.S. Treasury yields, according to the speaker?

The spike in U.S. Treasury yields is attributed to strong job creation in the U.S., with over 200,000 jobs created last month, which exceeded expectations and reduced unemployment by 0.1%.

What does the speaker think about the Federal Reserve’s potential actions regarding interest rates?

The speaker is uncertain about the Federal Reserve’s next steps but speculates that the Fed might cut interest rates by 0.25% instead of 0.5%, or they might hold the rates steady and wait for more data.

Why does the speaker find OCBC Bank more attractive compared to DBS and UOB?

The speaker finds OCBC Bank more attractive because of its current valuation, book value, and dividend. They note that OCBC's price has weakened more than DBS and UOB, and it has entered oversold territory.

What support levels does the speaker identify for UOB shares?

The speaker identifies strong long-term support for UOB at $28 per share and immediate support at $30 per share. They believe there’s a higher likelihood that the price could reach $30.

What are the support levels the speaker identifies for DBS shares?

The speaker sees long-term support for DBS at $30 per share, which is the neckline of a double bottom. They also note support at $33 per share and more immediate support at $35 per share.

What is the speaker’s plan regarding their investment in local banks?

The speaker plans to wait for the right prices to add to their investments in the local banks, specifically OCBC, DBS, and UOB. They are maintaining their Treasury Bill ladder in the meantime.

What advice does the speaker give at the end of the transcript?

The speaker encourages the audience by saying, 'If AK can do it, so can you,' suggesting that the strategies they are discussing are accessible to others as well.