- Interest rates have peaked and entered a downcycle. S-REITs typically outperform the broader market when the Fed cuts interest rates and domestic interest rates in Singapore fall in tandem. Maintain OVERWEIGHT on S-REITs sector.
- - Read this at SGinvestors.io -
- CapitaLand Ascott Trust (SGX:HMN),
- Keppel Pacific Oak US REIT (SGX:CMOU),
- Keppel REIT (SGX:K71U),
- Lendlease Global Commercial REIT (SGX:JYEU) and
- - Read this at SGinvestors.io -
The interest rate cycle has reversed course.
- The Fed paused rate hike for the third consecutive FOMC meeting on 13 Dec 23. We expect the Fed to commence rate cuts in 2H24.
- Based on the dot plot, the median projected path for Fed Funds Rate is 4.6% by end-24 (previous: 5.1%) and 3.6% by end-25 (previous: 3.9%), indicating rate cuts of 75bp in 2024 and 100bp in 2025. The dovish bias can be seen from the downward shift in the dot plot by 50bp in 2004 and 30bp in 2025.
- Inflation has turned the corner, COVID-19-induced supply-side distortions have normalised.
Not if but when.
- Read more at SGinvestors.io.
Above is the excerpt from report by UOB Kay Hian Research.
Clients of UOB Kay Hian may be the first to access the full report in PDF @ https://www.utrade.com.sg/.
Jonathan KOH CFA UOB Kay Hian Research | https://research.uobkayhian.com/ 2024-01-03
Read More Analysis On Singapore REITs (S-REITs):
Analyst Reports on Singapore REIT Sector
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S-REIT Share Price Performance
S-REIT Target Prices & Ratings
