Why you should bank on these stocks to continue outperforming

SINGAPORE (May 12): DBS Group Holdings, Oversea-Chinese Banking Corp and United Overseas Bank have been among the strongest drivers of the Straits Times Index recently. Since the beginning of the year, their stocks have rallied 20%, 17.3% and 17.3% respectively, while the STI has climbed 12.8%.

Even after their recent run, the valuations of the local bank stocks have not been pushed to extremely high levels.

Shares in DBS are now trading at 1.18 times its book value, and OCBC and UOB are currently trading at 1.2 times their respective book values. Over the past decade, they traded at an average of 1.22 to 1.4 times their book values.

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