As the rate cycle turns
■ We now see scope for NIM upside as early as FY23F, as Fed Pres. Bullard sees rate hikes in 2022F — earlier than the Fed’s end-2023 timeline.
■ Our study of rate hike cycles in FY04 and FY15 suggests that Singapore banks re-rate c.4-5 quarters ahead of the first Fed rate hike of the cycle.
■ This implies a possible re-rating cycle as early as 2Q-3Q21F, in case hikes start in 2022F. Reiterate banks Overweight as share price momentum sets in.