3 things everyone must look out for in OCBC's 2Q13 results

Will there be further margin contraction?

According to CIMB, key issues investors will look out for include: 1) whether guidance of margins bottoming is in sight, since management was relatively more bearish on margin guidance previously; and 2) if there are more concrete plans on its Indonesian and China expansion strategy.

On margins, CIMB suspects that OCBC will continue to see margin contraction in 2Q. On regional opportunities, both Indonesia and China have issues currently.

Here's more from CIMB:

China has seen its PMI plunge to an 11-month low today and employment at its weakest in four years - data clearly reflects a broad slowdown is underway.

Indonesia has seen a current account deficit come up as its commodity exports slow. Its CPI has headed up after the recent fuel subsidies cut. GDP growth expectations have been cut.

Broadly speaking, the slowdown in China and ASEAN does not bode well for the Singapore banks, not just OCBC - we will be watchful on further economic data deterioration.

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