Singapore Post & UOB: Tie-up to distribute HDB home loans

Singapore Post (SingPost) has tied-up with United Overseas Bank (UOB) to distribute UOB HDB Home Loans, and has set up limited purpose branches at four SingPost post offices. The plan is to have up to 24 such post office branches by end 2009, and adds on to the variety of services that SingPost currently offers to customers. Known for its proactive measures in launching initiatives to sustain profits, we view this latest development positively as it is further testament of the group’s desire to be a one-stop-shop service provider for customers. We maintain our BUY rating for SingPost with fair value estimate of S$0.93, though we do note that the flagging economy may weigh on the stock price at least for the short term.

For UOB, this is another interesting avenue to branch into the HDB home loans market and we note that HDB prices have remained fairly resilient despite the recent collapse in most sectors of the economy. We are maintaining our estimates and HOLD rating for now and fair value estimate of S$9.30.