BENGALURU: Major banks in Southeast Asia declined more than 1 percent on Thursday, with the region’s top lender, DBS Group, dragging Singapore stocks more than 3 percent lower as rising bond yields brought into focus risks to bank earnings growth and funding costs.
The MSCI EM Asia equities index declined 1.8 percent in its worst day since early September, largely weighed down by a 2.6 percent drop in South Korea’s KOSPI.
In Singapore, the FTSE Straits Times index shed as much as 3.2 percent to hit its lowest since mid-July, with DBS dipping 5.2 percent to mark its steepest daily loss since April last year.
Smaller rivals OCBC and UOB fell nearly 5 percent each. Together, the three banks account for more than half of Singapore’s main index, and make up more than a third of the MSCI ASEAN equity gauge, which marked its worst daily drop since early March.
The negative sentiment crept into banking stocks across the region. Malaysia’s largest bank by assets Maybank fell as much as 0.6 percent, pushing stocks in Kuala Lumpur down 0.9 percent.
Smaller rival CIMB Group slipped 1.9 percent to hit its lowest in a year. Thailand’s Kasikornbank declined as much as 2.1 percent to its lowest in three months.