- Through the course of 2024, the US two-year and 10-year yields are projected to decline to ~4.30% and ~4.5%, respectively, according to DBS projections. Following suit, SG 10-year yields are also expected to decline to ~3.15%. With S-REITs' share prices trading at a FY24F yield of 6.8%, this implies that expanding yield spreads of close to ~4.0% will leave room for share prices to normalise.
Rate pause positive for interest rate-sensitive sectors.
- - Read this at SGinvestors.io -
- Back in the 2018-2019 period prior to the first rate cut in mid-2019, over the period of FED pause from 2018 to 1H19, S-REITs and Developers rose by 15% and 17%, respectively, compared to the 8% rise in the Straits Times Index (STI).
Where is the growth?
Growth showing a gradual rebound in 2024.
- - Read this at SGinvestors.io -
- Manufacturing activities have been in “recession” through 2023 but are seeing brighter times in recent months. We note that Singapore’s non-oil domestic exports (NODX) in Oct 23 has rebounded and we see growth going forward. A humming economy could also mean that consumer confidence is returning with a potentially higher spend next year.
Real Estate sectors continue to see positive momentum, albeit slower y-o-y.
- 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 | Rachel TAN DBS Research | Dale LAI DBS Research | https://www.dbs.com/insightsdirect/ 2023-12-14
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