Singapore Bank Stocks Just Fell Hard. Are They Overvalued, or Is This a Normal Pullback or A Major Crash Coming?

Hi Folks, welcome back to Investment Income For Life. For most of 2026, owning DBS, UOB and OCBC was easy. Then on 7–8 October the three banks lost between 6% and 10% in just two trading days. Many investors are now asking whether the rally went too far and there are many posts on social media talking about it and there are a lot of fear mongering on further crashes in banking stock prices.

1. What happened? 

On 8 October DBS closed at S$73.85, UOB at S$40.25 and OCBC at S$29.00. Two days earlier they were at about S$78.56, S$43.72 and S$32.20. OCBC fell the most after Citi downgraded it to “Sell”. Citi expects flat third-quarter earnings and also pointed to a weaker wealth-management outlook and valuations above regional peers. Other reasons given for the sell-off:

(i) The US 10-year Treasury yield rose to 5.32%.

(ii) Bank shares were being sold around the world.

(iii) Investors took profits after a very strong run.

2. My Personal Perspective and Thoughts. 

Even after the drop, DBS is still up about 36% over 12 months, UOB about 14% and OCBC about 72%. OCBC now trades at about 2.1 times book value, up from roughly 1.4 times at the end of 2025. That is where the “overvalued” worry comes from.

3. Three ways to handle it if you hold these banking stocks

(i) Look at the drop against August prices, and keep holding. The fall looks much smaller next to prices two months ago than next to the September peak. OCBC traded around S$29–30 in early August, which is about where it is now. DBS (S$73.36) and UOB (S$40.25) are back near their mid-to-late August levels. If you bought for the long term and the dividends, giving back about two months of gains may be no reason to change your plan.

(ii) Worried about valuations? Sell half lor. If high price-to-book ratios make you uneasy, a common middle path is to sell half of each bank position. You lock in part of a very good year, but you still collect dividends and keep some upside if prices recover. It also takes away the pressure of having to call the top exactly right. This was my approach to OCBC back in August 2026 when it traded above S$29 per share and sold around half of it and re-invest the proceeds into other non-banking stocks.

(iii) Optimistic? Then try buying more during the current price correction lah. Some investors believe higher interest rates will lift banks’ net interest margins (the gap between what banks earn on loans and pay on deposits). They also expect wealth management to keep growing while rates stay high. For them, a 7–10% pullback from record highs is a chance to buy, and some analysts still see upside for DBS and UOB. A fair warning: some analysts expect the opposite. They see rising deposit competition and a lower SORA (Singapore’s benchmark interest rate) squeezing margins. Buying in two or three smaller lots ahead of the third-quarter results lowers the risk of buying too early.

Personal Thoughts

Honestly, I am not sure why there seems to be a ruckus being made due to the sharp plunge in valuation over 1-2 days. DBS, UOB and OCBC are definitely over-priced and this ecstasy cannot keep running up forever especially when we are talking about the Singapore SGX. So, if one is super worried about further crash such that you can no longer sleep peacefully at night, then just sell half of one's current holdings. Ok folks, that's all from me today. Have a great week ahead!

Collect Dividends Every Year- Fourteen Years of Portfolio Growth, Setbacks and Lessons.

A quick summary of my investment journey and the various economic crisis that I went through as a Passive Income Focus Investor.

Keppel Ltd Stock at 2 Times Book Value: Smart Buy or Too Late?

 

The "New" Keppel transformation is executing right on track. M1-Simba deal collapse but Starhub now in driver seat.

Crazy Donald Trump Sending 3rd Aircraft Carrier Group and 10,000 US Troops To Middle East- The Art of the Deal.

Hi Folks, welcome back to Investment Income For Life. The crazy Donald Trump and the worst President in US History is sending a 3rd US aircraft carrier strike group (the USS Theodore Roosevelt) and also an additional 10,000 US ground troops to the Middle East. So by the end of November 2026, we will see 3 aircraft carrier groups and also 2 amphibious landing groups positioned extremely near Iran. So looks like Donald Trump is planning to escalate the war with some ground operations. No wonder there has been so much volatility in the stock market lately especially for SREITs. Looks like grappling with interest rate hikes from the US Federal Reserve is not enough.....Trump is back with his crazy antics and more of his "Art of the Deal" negotiation tactics against Iran.  

Here is the greatest irony: US is grappling with a shortage of munitions but then Trump just sent the 3rd US aircraft carrier strike group out with threats of new bombardment campaign against Iran (and possibly ground troops entering Iranian soil for special operations). Additionally, such massive deployment will mean more exorbitant cost incurred for the Iran war. US is already facing a record fiscal deficit. Oil prices remained high at over US$100 per barrel with the latest announcement. Most economic sectors are already facing substantial increase in business cost due to high energy prices for the past year. 

Will the escalation in US-Iran war be the last straw that broke the camel's back and trigger off a global recession?

Market Crash For Bonds, Equities and Gold- Is a Recession Coming?

Hi Folks, welcome back to Investment Income For Life! Wow, so many YouTube videos on plunging asset prices. SREITs continue to spiral downwards with an all year low. The scary thing on everyone’s mind is how low will SREIT crash to. Bonds is not spared and even US Treasury are getting whacked with so many institutional selling off of US long term bonds despite soaring record yield of 5.3%- so even risk free US 10 year bond is no longer perceived as risk free….haha. Even Gold price, the safe haven asset, has started plunging. Those who bought at the high of US$5,264 per oz earlier in February 2026 would have been devastated by the crash of more than 20% to current level of around US$4,100 per oz within half a year. Against this backdrop of plunging investment assets prices, there are more and more news published of folks losing their jobs. So is a recession coming? Also is it time to sell off some equities to prevent further dip in the investment portfolio? 

1. Sell off Equities Investment To Wait For Sell-off Momentum To Be Over?

Well, folks who have read my blog post will know that I am not a fan of market timing and speculation. Also, if the market started to rally after one has sell-off, then it would be a very painful and regretful investment decision (not to mention foolish). So far, only my SREITs is free-falling. My HKEX Tech stocks have fallen but they still remained in an acceptable range especially Alibaba which is still above my average cost. Of course, if I have a crystal ball, I would have sold off half of my SREITs in the beginning of the year. Also, I would have sold off Alibaba when it touched HKD180 previously on hindsight…haha…but then we cannot reverse time right?

I am staying away from most SREITs for now despite the very attractive new prices for REITS such as Capitaland Ascendas REIT, Mapletree family REITs etc. Nevertheless, I took a nibble (S$2k to S$3K) into additional United Hampshire US REIT (“UHREIT”) which is giving close to a 9.9% yield. I may further accumulate it if its price plunged further.  On UHREIT, the complexity lies in assigning a depreciation rate to the USD vs SGX forex loss due to US printing money and mammoth budget deficit. From table 1, it is best to prepare for a negative depreciation in USD investment of -2.6% per year. So a yield of 9.9% from UHREIT true-up will mean around 7.3% of distribution yield compensation for grocery related strip malls. Also, pray hard that Donald Trump will not come up with new withholding taxes on REITs with US holdings.

Table 1- USD vs SGD Decline %

2. US Government and Corporate Bonds.

While there are many doom day videos on US Treasury, I personally think that it is overly done. The record high yield of over 6% to 6.5% yield for some of the commercial bonds at AA- ratings is becoming very attractive. Compare to diving in to grab SREITs, I actually prefer to put more of my money into a diversified portfolio of bonds especially those that hold bonds for only mid term tenure of 3-5 years. 

I think that once the AI boom worldwide gradually slow down (we are already seeing AI CEOs coming out to give excuses using AI safety and the necessity of slowing down the rolling out of new frontier models), the US Fed will need to start cutting rates again in order to drive much needed growth for the stagnant US Economy. Once rate are cut, bond prices will have capital appreciation. So earn the 6% plus in annual yield and enjoy future potential capital gain. I don’t think US Treasury is going down the path of being worthless immediately.  

 

3. Gold As Alternative Asset During Economic Crisis

I can only say that I am glad that I have sold off my few thousand dollars foray into Gold before the peak of February 2026 for a small profit. Who would have thought that the gold craze party will end so abruptly in just another half a year and also while amidst the ongoing Russian Ukraine war as well as US-Iran war? I am staying away from Gold. But if it dropped to the US$ 3,000 level, I would think then that it is probably a good idea to get some to diversify my investment portfolios as I like its non sticky correlation to other class of investable assets.

Parting Thoughts

I think that there is currently a lot of market volatility and also potential further plunge in equity investments especially high interest rate that surely will crash the fragile marco economic environment sustained only by AI. As such, my preference now is to keep most of my dividends to build up cash reserves and also invest into bond funds. Should equities crash further, I will sell off most of my bonds funds and switched them into buying blue-chip SREITs at high yield of 6.5%-7%+.  

(Note: Please also see my latest investment portfolios as at 16 September 2026 here.)

Keppel DC REIT 6.24% Forward Dividend Yield?

Hi Folks, welcome back to Investment Income For Life. Over the weekend, I was looking at whether there are opportunities to accumulate some additional SREITs that are at a good discount and also dividend yield. From StocksCafe, I noticed that Keppel Data Centre REIT ("KDC") is showing a 6.24% distribution yield at price of S$2.12 per unit.. This seems like a good deal to me and I thought that the recent market price crash for SREITs is giving out some good opportunities. 

1. Is the 6.24% Distribution Yield Valid?

Unfortunately not so. The StockCafe system takes into account the early distribution of dividend due to acquisition exercise during the year. Add this on to the system forecast based on historical reference, the system thus ended up with a 6.24% high distribution yield.  

Based on the unit price of S$2.12 as at 25 September 2026, this translates to a distribution yield of s smaller 5.4% based on half year annualised of 1st half results of 5.714 cents.

Saying that NAV per unit as of 1H FY2026 is S$1.73 per unit. This is still a massive 1.29 times premium over the latest market trading price of KDC.

Extract from 1H2026 KDC Results as well as Previous FY

2. Good thing is Aggregate Leverage Ratio at only 34%.

KDC has maintained a prudent borrowings of less than 40% over the past 5 years. Its latest half year result indicated an aggregate leverage ratio of only 34%.

Parting Thoughts

On 1 September 2026, KDC agreed to buy stakes in two Tokyo data centres, Tokyo Data Centre 4 and 5. While KDC appears to be on a growth path again with major acquisitions for the past few years, I think that it appears to be still over-priced. from its NAV per unit and also offered a relatively unattractive low distribution yield of only 5.4% (taking into account that US Fed has hiked interest rates again). Should KDC dropped below S$2 per unit, it maybe worth a re-look.  

The Tan Kin Lian "Lending Money To Needy Folks" Saga.

Honestly, I am puzzled why our ex-presidential candidate, Mr Tan Kin Lian, went on from previous controversy of  posting pretty Xiao Mei Mei on social media to the now giving "emergency loans" to people who approached him. Back in August 2023, a TikTok video featured screenshots of several Facebook posts he had made about women he met around the country. Women's rights group AWARE expressed concern over his comments then.

1. The Current Emergency Loan Saga

Apparently, Mr Tan has been granting emergency loans to various locals to help them. Trouble brewed when they failed to repay him and he started publishing their names online. Mr Tan also asserted that a number of these borrowers did not honour the repayment terms after their emergency and some even went missing in action and uncontactable. He may even escalate by "asking" the employer of these defaulters to "pass a message". So now, Mr Tan has become a debt collector this time round. 

2. Strange Views To Lend Money to Strangers And Then Trouble In Debt Collection.

This is a very strange case of lending money to people who obviously have very weak financial position since they cannot get any loans from bank or private loans from legalised money lenders. Additionally, the money is lent to strangers whom Mr Tan does not know well.

Hence if one lends money, probability of recovery will be low. I thought anyone lending money will probably know this basic 101 of life? But now Mr Tan is ranting on and off about the defaulters who are not honourable. Also, posting online the names of the defaulters may get Mr Tan into legal trouble as there are many innocent folks in Singapore with the same name and surnames. 

Parting Thoughts

Sometimes, I really cannot comprehend how one end up in such a mess when it could have been easily avoided with some basic common sense or street-smartness gleaned from decades of exposure to life. Nevertheless, this Tan Kin Lian latest saga served a good financial lesson to everyone here as a good reminder that lending money to people can end up in default. Only lend what you can lose. 

But personally, having seen many friendship being soured over personal loans, I will rather be firm to needy friends who asked for emergency loans. Also, the hard truth here is that I do not have much cash on hand or in bank....most of my funds are locked up in investment for retirement....haha. So do not look for me for emergency loan. :p