10/02/2026

BIZ & FINANCE TUESDAY | FEB 10, 2026

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DBS Q4 profit sinks 10% as lower rates hit margins

Pension fund says Aussie dollar undervalued SYDNEY: A major Australian pension fund has been increasing the hedging of its international equities portfolio, saying the Australian dollar has been undervalued as the country’s central bank starts to tighten rates while most major economies keep rates on hold or prepare to cut. Jeff Brunton, the head of portfolio management at HESTA, which has A$100 billion (RM276 billion) in funds under management, said the fund has been boosting its holdings of the Australian dollar. “We’re long-term investors and we are quite valuation driven and our long-run valuation models for the Australian dollar have been suggesting for quite a while now that it has been undervalued,” Brunton told Reuters in a phone interview. “If we’re holding international equities and the Australian dollar is rising, the value in Australian dollars and those international equities would be falling. “But the hedge protects the portfolio in that environment. And we’ve had more Australian dollars and less foreign currency compared to our long-term settings.” Most Australian pension fund investors in US equities would have very little currency hedging because the dollar was expected to rise on negative shocks. HESTA is the second major fund to increase its international equity hedging recently, with Australia’s second-largest fund Australian Retirement Trust saying it has lifted its hedging strategy lately. Increasing Australian dollar buying to hedge international equities portfolios by pension funds could put upward pressure on the currency, according to analysts. The Australian dollar rose 4.3% last month to hit its highest in three years, and it is up almost another 1% in February. The Reserve Bank of Australia last week raised the official cash rate by 25 basis points to 3.85%, making it one of the few global central banks to be increasing rates at a time when most others are either cutting rates or keeping them on hold. – Reuters

o Singapore’s biggest bank announces S$0.66 final ordinary dividend

SINGAPORE: Singapore’s biggest bank DBS Group yesterday maintained its expectation that net profit this year will dip slightly from 2025, after posting a 10% drop in fourth-quarter earnings that was weighed down by a lower net interest margin. DBS, which is also Southeast Asia’s largest bank by assets, said October-December net profit dropped to S$2.26 billion (RM7 billion) from S$2.52 billion a year earlier. That missed the mean estimate of nearly S$2.55 billion from two analysts, according to LSEG data. “The key driver for the underperformance in 4Q25 was weaker-than-expected markets trading income,” CGS International

Indonesia to hold follow-up meeting with MSCI this week JAKARTA: Indonesia will update MSCI with progress it has made for capital market reforms at a meeting this week, the Indonesian Stock Exchange (IDX) said yesterday, after a warning by the index provider wiped tens of billions of dollars off its equity market. About US$120 billion in market value has been erased from Indonesia’s capital market since MSCI late last month flagged concerns about ownership and transparency in stocks. Last week’s bond rating outlook downgrade to negative by Moody’s for Indonesia’s government and companies worsened sentiment, triggering more capital flight from Southeast Asia’s biggest economy. The IDX said in a statement it would hold a follow-up meeting with MSCI to discuss progress on Indonesia’s reform proposals on the second week of February. State news agency Antara reported the meeting will take place tomorrow. IDX executives and financial regulators had already held a virtual meeting with MSCI on Feb 2, during which Jakarta proposed disclosing names of shareholders with at least 1% ownership, providing more specific classifications of investor types and doubling the minimum free float of shares to address MSCI’s concerns. – Reuters Smaller peers United Overseas Bank and Oversea-Chinese Banking Corp are due to announce their results on Feb 24 and 25, respectively. – Reuters “slightly below 2025 levels”. “I tell all our clients ‘buckle up, it’s going to be a volatile year’ ... I hope that DBS will continue to be a beneficiary of these global volatile winds,” said Tan. According to the bank’s financial statement, provisions for bad loans jumped 81% to S$415 million in the fourth quarter, mainly due to real estate exposure, while DBS wrote back S$206 million in general allowances, including amounts previously set aside for that exposure. The bank declared an ordinary dividend of S$0.66 per share and a capital return dividend of S$0.15 per share for the fourth quarter. DBS added that it plans to continue the capital return dividends for financial years 2026 and 2027, barring unforeseen circumstances. CGS International reiterated its “hold” call on DBS, saying the dividend outlook helps support the stock. DBS is the first Singapore lender to start this earnings season.

The wealth segment’s assets under management meanwhile grew 19% in constant-currency terms to a new high of S$488 billion in the fourth quarter. At the bank’s results briefing yesterday, CEO Tan Su Shan said that despite a “perfect storm” last year in terms of rates and a strong Singapore dollar, she was pleased that DBS delivered record pre-tax profit and deposit growth in 2025, among other things. For the year ahead, the bank is forecasting net profit to come in

analysts Tay Wee Kuang and Lim Siew Khee wrote in a note yesterday. Shares of DBS last traded 1.1% lower at S$58.63, having fallen nearly 2% earlier in the session. The domestic benchmark index was up 0.6%. For the period, overall group net interest margin, a key profitability gauge, stood at 1.93% as compared to 2.15% the previous year, with net interest income impacted by lower domestic rates. Return on equity declined to 13.5% from 15.8% a year ago.

People use DBS automated teller machines in Singapore. – REUTERSPIC

Contender for BOK governor backs higher property taxes SEOUL: Lee Seung-heon, one of the leading candidates to become the next Bank of Korea (BOK) governor, backs raising taxes on property ownership to stop surging home prices from stoking inflation but a policy pivot to more monetary tightening would be premature. their own homes. “When it comes to property market policies, I don’t think it’s possible to stabilise the market unless the cost of owning homes actually increases by raising property ownership taxes, for instance,” he said. 2024, as a weakening won along with upswings in Seoul’s apartment prices forced policymakers to shift towards financial stability. The BOK left the benchmark interest rate at 2.50% for a fifth meeting on Jan 15. The yield on three-year counterparts like the US Federal Reserve and the International Monetary Fund. But one of the first issues he could be facing would be the rising cost of homeownership in the country.

Lee’s comments backing raising property taxes echo those of President Lee Jae Myung, who has been urging people owning multiple homes to sell before the government raises real estate taxes. Although South Korea imposes exceptionally high stamp duties and capital gains taxes on property sales of more than 60%, its ownership levies remain comparatively low. On the won, which is currently trading at 1,465.30 per dollar, Lee said the currency is where it should be. “Somewhere between 1,400 and 1,470 is what I call a natural range for now,” he said. – Reuters

government bonds, a key indicator of market expectations for the benchmark rate, has been steadily climbing from the middle of last year as traders scaled back expectations for additional monetary easing. Strong semiconductor exports have been shielding Asia’s fourth-largest economy from the impact of higher US tariffs, as demand for AI-driven memory chips boosts corporate earnings and domestic investment. During his tenure at the BOK, Lee worked on currency policies and also represented the bank with

But overall monetary policy should stay steady as “it’s a bit too early” to signal possible interest rate increases. “Growth is still a bit weak. We need to gain momentum here so I’d say the market is moving too quickly. While the direction may be right, I think it’s too hasty,“ Lee said, referring to recent gains in three year treasury yields which hit a 19 month high last week. South Korea’s central bank recently adopted a neutral stance after four rate cuts since October

Lee, who previously held the No. 2 spot in the central bank as senior deputy governor, is regarded as a potential successor to replace BOK Governor Rhee Chang-yong, whose four-year term ends on April 20. In an interview on Feb 6, Lee said he does not see a need for immediate policy tightening but said the government should introduce stronger curbs on the housing market as a rally in property prices could reignite inflationary pressure and prevent middle-class families from buying