Emerging Markets: Banks drive Singapore stocks to three-month low as brokerages flag earnings risks

Samsung Electronics

08/10/2026 06:51

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Singapore benchmark hits mid-July low
DBS, OCBC, UOB down more than 4%
Samsung expects quarterly profit to jump nearly 9-fold
By Nikita Maria Jino
Oct 8 (Reuters) - Equities in Singapore dropped more than 3% to their lowest in nearly three months on Thursday, as surging bond yields raised concerns over banks' earnings and funding costs, prompting brokerages to recommend trimming exposure.  
Singapore's benchmark FTSE Straits Times index .STI shed as much as 3.2% to hit its lowest since mid-July, pushing the broader MSCI ASEAN equities index .MISU00000PUS 2.2% lower in its worst session since early March.
JPMorgan and Citi raised concerns over Singapore banks’ earnings outlook, citing surging long-dated bond yields, higher funding costs and the normalisation of exceptional first-half wealth-related income.
JPMorgan recommended trimming DBS Group DBSM.SI, Southeast Asia's largest lender by assets, as well as its smaller rival OCBC OCBC.SI, while Citi downgraded OCBC to sell citing lower earnings expectations.
DBS DBSM.SI dipped 5.2% to log its largest single-day decline since April last year. OCBC OCBC.SI and UOB UOBH.SI shed 4.8% and 5.3%, respectively. All three banks account for more than a quarter of Singapore's main index.
"A combination of higher rates, AQ (asset quality) risks, funding tightness and capital-market-related revenue risks should impact quite a few bank stocks going into 3Q results," J.P.Morgan analysts led by Harsh Wardhan Modi wrote.
Citi flagged "downside earnings risks to street forecast into 3Q26e results on market misplaced optimism on SGD rates and after an exceptional 1H26 wealth-related income".
John Cheong, head of Small Mid Cap research at UOB Kay Hian Research, said, "the narrow rally of the (Singapore) stock market concentrated in financials appears to be reversing", but added that it was too early to say whether "this is a short-term hang-up" considering banks' strong year-to-date performance.
Elsewhere in emerging Asia, South Korea's KOSPI .KS11 fell as much as 2.3% to a near one-month low, while Taiwan's stocks .TWII slipped 0.9%, pushing the MSCI EM Asia equity index down as much as 1.2%.
Samsung Electronics 005930.KS projected its quarterly profit would top 100 trillion won ($74.76 billion), a world-first for a technology company, estimating a nearly nine-fold jump in Q3 earnings as booming demand for AI chips drove strong memory sales.
The chipmaker's shares, however, slipped more than 2% to a mid-September low.
Stocks in Thailand .SETI, Indonesia .JKSE and Malaysia .KLSE fell between 0.4% and 1%, while those in the Philippines .PSI slipped 1.6%.
Currencies in emerging Asia remained rangebound against a largely steady US dollar. An MSCI gauge of global emerging market currencies .MIEM00000CUS stayed unchanged during Asia trading hours.
     
     
HIGHLIGHTS:    
** BOJ's dovish dissenter signals support for future rate hikes
** CrowdStrike says China-based suspect used AI tools in South Korean bank hacks
** Taiwan's US envoy says ties robust after Trump-Xi summit
     
Asia stock indexes and currencies at 0515 GMT
COUNTRY
FX RIC
FX DAILY %
FX YTD %
INDEX
STOCKS DAILY %
STOCKS YTD %
Japan
JPY=
-0.07
-0.96
.N225
-0.78
+34.07
China
CNY=CFXS
+0.03
+4.25
.SSEC
-0.29
-3.47
India
INR=IN
+0.02
-7.12
.NSEI
-7.24
-14.06
Indonesia
IDR=
-0.06
-6.79
.JKSE
-0.80
-29.48
Malaysia
MYR=
+0.02
-0.71
.KLSE
-0.69
-4.73
Philippines
PHP=
-0.08
-6.25
.PSI
-1.68
-6.82
S.Korea
KRW=
+0.16
+7.67
.KS11
-1.21
59.50
Singapore
SGD=
-0.05
+0.41
.STI
-3.31
16.72
Taiwan
TWD=TP
-0.25
-1.37
.TWII
-0.74
70.70
Thailand
THB=TH
+0.02
-6.46
.SETI
-0.40
25.30
     
($1 = 1,337.5900 won)

 (Reporting by Nikita Maria Jino in Bengaluru; Editing by Jochelle Mendonca)
 ((Nikita.Jino@thomsonreuters.com;))