Thursday, November 18, 2010

Which bank will benefit the most from a rise in SIBOR?

A wrong move made!And another wrong move!Its so hard to find good investment opportunities these days. Anyway, with all the talk about how interest rates are so low now and the only way forward is for it to move up gradually, let us try to position ourselves for this expectation shall we?

SIBOR stands for Singapore Interbank Offer Rate - simply put,interest rates for deposits,loan e.t.c rise if SIBOR rises.
NIM stands for Net Interest Margin which is measure of the difference between the interest income generated by banks or other financial institutions and the amount of interest paid out to their lenders(for example, deposits), relative to the amount of their (interest-earning) assets. )

Development Bank of Singapore (DBS)
See how it correlates with the SIBOR......when sibor goes up, DBS NIM ( net interest margin goes up)
United Overseas Bank ( UOB)
Hmmph, NIM seem to be negatively correlated with SIBOR....

Overseas Chinese Bank of Singapore (OCBC)
There don't seem to be any correlation between SIBOR and NIM. Is there?

With hyperinflation and a gargantuan wave of hot money coming in, are you ready?

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