- The S-REITs endured a weak Sept on rising investor expectations that interest rates are likely to remain stickier than normal. The FSTREI index is down ~3% in Sept 23, underperforming the Straits Times Index (STI), which is similarly down, by ~1.5%.
- - Read this at SGinvestors.io -
SG rates likely peaked but refinancing costs still on an uptrend.
- In recent weeks, we note that the 3-Year and 5-Year SORA OIS rates inched higher, past previous highs, and are now close to 3.5%. Our economist expects SG rates to peak in 3Q23 with a gradual decline of over 50-60bps over the course of 2024. That said, base rates are still close to 250bps higher than the past two to three years.
- - Read this at SGinvestors.io -
- Even on the assumption that companies face some form of credit margin compression, overall costs should remain on the rise, with stabilisation to be seen sometime in 2025.
What could change our view?
- 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/.
Derek TAN DBS Group Research | Dale LAI DBS Research | Geraldine WONG DBS Research | https://www.dbs.com/insightsdirect/ 2023-10-02
Read More Analysis On Singapore REITs (S-REITs):
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