- Interest rate fears bite again; S-REITs likely to feel near term price pressure – Our call to ride the early-year rally in S-REITs in expectation of a pause in Fed rate hikes in 1Q23 has worked but now appears to be short-lived, as recent macro datapoints (inflation, job numbers) in the US came in hotter than expected, despite a barrage of aggressive rate hikes in 2022. This prompted the Fed to turn more hawkish, guiding for more rate hikes to come with the aim to tame inflation further.
- - Read this at SGinvestors.io -
- Despite the near-term downward bias in prices, we remain optimistic that the weakness will be short-lived, as we are at the tail-end of the current cycle of Fed rate hikes.
Singapore economy expected to be resilient, but in which subsectors can we find sustainable growth?
- - Read this at SGinvestors.io -
- In the S-REIT space, we remain comforted that overall operational fundamentals are tracking expectations – we see a two-year DPU CAGR of ~3.0% (-0.5% if we exclude hospitality S-REITs) over FY22A-24F, dragged by the impact of higher refinancing rates and forex losses for selected S-REITs.
- At this point, with forward guidance generally positive, we remain comfortable and do not envision further cuts to our FY23F estimates.
Positioned for resilience.
- Read more at SGinvestors.io.
Above is the excerpt from report by DBS Group Research.
Clients of DBS may access the full report in PDF @ https://www.dbs.com/insightsdirect/.
Geraldine WONG DBS Group Research | Dale LAI DBS Research | Rachel TAN DBS Research | https://www.dbs.com/insightsdirect/ 2023-03-14
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