DBS, OCBC Shares Hit Record Intraday Highs as Expectations for Fed Cuts Fade

By Amanda Lee

Shares of two major Singaporean lenders DBS Group and Oversea-Chinese Banking Corp. hit record highs as investors bet on fewer Federal Reserve rate cuts and the strength of the banks' wealth management business.

DBS's shares climbed as much as 1.05% to a record 61.40 Singapore dollars, equivalent to US$48.01, on Tuesday while OCBC shares gained 0.8% to briefly touch an all-time high of S$23.22. DBS and OCBC were both recently 0.6% higher.

The banks' shares are fundamentally driven by U.S. inflationary pressures, which could mean higher-for-longer U.S. interest rates, said CGS International analyst Tay Wee Kuang in an email.

Expectations for Fed rate cuts have been falling as the Middle East conflict sends up fuel prices as well as U.S. inflation. That in turn has been pressuring up Singapore's benchmark interest rates, which tracks U.S. rates.

Both the 10-year Treasury yield and the two-year yield were recently close to their highest levels since February 2025.

Tay said the recent rise in the benchmark interest rate in Singapore is lifting expectations for stronger net interest income for the banks.

Singapore's benchmark rate rose to as high as 1.4% in recent weeks from the low of 0.8% last month and is currently around 1.1%, Tay said.

The banks' stocks are also on a tear after their strong first quarter earnings, which were supported by their wealth management businesses. Banks like DBS could continue to benefit from funds flowing into Singapore amid rising geopolitical tensions in the Middle East, analysts said.

OCBC's latest acquisition of HSBC Holdings' wealth management and retail banking business in Indonesia, should also help OCBC grow its fee-based business, S&P Global Ratings analysts said in a recent note.

Write to Amanda Lee at amanda.lee@wsj.com

(END) Dow Jones Newswires

May 19, 2026 00:30 ET (04:30 GMT)