As openly requested by one of my favourite pioneer retail investor-cum-blogger (CW8888) to do a CNAV (Conservative Net Asset Value) Analysis on our local banks i.e. DBS (D05), UOB (U11) and OCBC (O39), I am more than happy to accede to his request and hence this post (even though on the top of my head, I more or less know result that I am about to get).
It took me about 30 minutes to obtain the details and compiled the following summary (source of data : Yahoo Finance Singapore) :
In short, all three banks "failed" my CNAV test. It is not because they are not good enough but simply because they are not "convervative" enough ;-) Of cource, if you are looking at the counters from another investing strategy, the outcome might be totally different.
Cheers!
Thank you so much!
ReplyDeleteAs expected. If we use a hand held fish net we will catch ikan bilis. LOL!
Cw8888 : ya lor, because not everyone has such a big fish net (read war chest) like u that can catch big fishes mah! Hahaha
Deletebanks are in the business of borrowing and lending money, if you read any analyst report in the world, be it any country or region, none of them uses debt to equity ratio on a bank.
ReplyDeleteto measure the financial stability or safest of a bank, normally one should look at tier 1 capital instead
also singapore banks are one of the most conservative in the world as compared to US and European banks, OCBC was also voted world's strongest bank by bloomberg
ReplyDeleteI strongly think you should read up more on how to value banks
Cheers
Felix : thanks for dropping by and comment. As I indicated, this post is meant to satisfy a request by my peer blogger and it is not meant to use as useful indication or anything.
DeleteThe Moral of the Story of this exercise ....
DeleteWe need to learn more on types of fishing gears available?
Cw8888 : sure is!
DeleteHi Felix : if i were to evaluate these "local financial institutions" with a regional presence (ie . our big three lar , pun intended, if you play fight the landlord you'll know what i mean ) all would fail my anyhow hantam valuation one , you see ah u bump their long term liabilities and short term liabilities by 80% and then lower their liquid assets by a 30-50% , see if they can tahan for one year or not . But well worst come to worse , they can ask for bailout , then there is something to watch out for though in the local banking scene , who might makan SCB's equity arm? oo
DeleteKen : Thanks for your input... ;-)
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