Invest Fair 2016: Piyush Gupta, CEO of DBS Group Holdings, speak with Diana Ser on Financial Matters at Singapore PowerList 1

In the PowerList talk 1, Piyush Gupta, CEO of DBS Group Holdings spoke candidly with Diana Ser about issues related to DBS and his outlook on the financial market as well as his own investment philosophy.

DBS Group Holdings has recently been awarded the best bank award, and the World’s Best Digital award. Mr Gupta shared that the digital bank award came as a surprise because DBS did not know that they would be nominated.

Mr Gupta shared the reason why he thinks banking can be digitised. Since the way we take a cab/drive or how we order food has been changed. For example, Uber reimagine how getting a cab would be like. However, some people are unwilling to do online banking because of security.

Question and Answer between Diana Ser and Piyush Gupta

Diana Ser: How do you rethink customer journey?

Piyush Gupta: We need to rethink technology architecture. The biggest challenge is how to change the culture of our people. We want to change to be like a start-up. DBS now has hundreds of experiments going on.

The leader needs to have a sense of the trend and point of view of future. The leader needs to translate these into choices that the company has to make.

Technology will change the way we live, with the prevalent use of smartphone, it will also change the way we do banking.

Diana Ser: Can you talk about Swiber’s announcement of being wound up?

Piyush Gupta: It is unfortunate. We encourage the company not to file for bankruptcy, but go for judicial management. We’ll need a week to say more. Investors can look out for Q2 financial results.

[Updates: For more information about DBS exposure to Swiber access links here:
Swiber imploded in just 6 weeks: DBS chief Piyush Gupta

DBS chief fails to ease analyst discomfort over oil and gas exposure

Diana Ser: Is there anytime when you regret becoming CEO of DBS?

Piyush Gupta: No. It’s the best job. Reason being for Citibank, I will not become the big boss.

Diana Ser: Can you speak about how you invest?

Piyush Gupta: I start with fundamentals. What are the macro trends? What would become larger? I go for the long term and have portfolio allocation.

If you want to make a lot of money, you need to concentrate. Most people make money by making concentrated bets. Make a few bets based on fundamentals when you’re younger. When in a stage in life where you need less risk, then do diversifications.

I’m bullish in Asia, because population in Asia are young. The average age in Asia is 20 whereas in US the average age is 30 plus. China’s growth rate is 6% where US is only 2%. I’m long on China and India.

Diana Ser: Is fintech a good investment?

Piyush Gupta: 9 out of 10 fintech will fail. If you look at Alibaba, valuation is very high, so you have to think how much more can still be made.

The floor was opened to take questions from the audience.

Question from audience: Can you talk about Brexit and the 2nd half of 2016?

Piyush Gupta: It depends on US. US economy is getting better, so will see pick up in Q3 and Q4.

There are challenges in Europe in the short term because of Brexit. UK will be affected in the short term because of weak pound. But in the next 24 months, it should be ok. A lot of DBS clients are looking into investing in UK.

I’m bullish on India and Indonsia.

On the financial side, UK is the 6th largest economy. London has been the financial centre for 500 years, so I don’t think this will change.

UK not being in EU will mean that they can change the tax quote. The fundamentals are not as bad as people make it out to be.

Question from audience: Why do you think banking stocks have low PE of less than 15x?

Piyush Gupta: There are three things.

A lot of people think the losses have not come out yet because of the exposure to oil and gas.

Banks needs to keep more capital so this will cause returns to drop. There are more and more regulations and these are still not confirmed, so people don’t know what to expect.

Negative interest rates. 2/3 of the world is having negative interest rates now.

Question from audience: How will the South China Sea issue affect Asia?

Piyush Gupta: One of the benefits of Asia is the peace and political stability. The US military in Asia has helped with peace and harmony in Asia. If there is argument in SE Asia, there will be political uncertainty.

The Q & A with audience came to an end and Diana Ser asked one last question.

Diana Ser: What is the best value that help you achieve what you have today?

Piyush Gupta: I have to give two. Number one is need to have a sense of purpose, to make a difference, to make an impact. Number two is stay rooted. I grew up in middle class family, so it’s easy to get to the head because I become CEO with high pay.

Disclaimer: This article has been written as closely as possible to what have been heard during the discussion. Errors are possible if the writer has misheard or missed any information. The writer apologies if any information has been misinterpreted. Any investment  information written is purely for education purposes and not advice for investment.