Singapore REITs - Maybank Research 2024-07-15: Upside Volatility; Make Hay While The Sun Shines

Singapore REITs - Upside Volatility; Make Hay While The Sun Shines

Published:
Singapore REITs - Maybank Research | SGinvestors.ioCapitaLand Integrated Commercial Trust (SGX:C38U) CAPITALAND ASCENDAS REIT (SGX:A17U) MAPLETREE LOGISTICS TRUST (SGX:M44U)
  • Conducive macro data points and sustained underperformance versus the STI and regional peers provide scope for outperformance for the S-REIT index, in our view. However, fundamentals still point to a decline in distribution without sustained rate cuts, and downside pressure on NAVs from revaluation losses.
  • - Read this at SGinvestors.io -

Room for rotation into the sector

  • US CPI for June fell 0.1% m-o-m, the first m-o-m decline since May 2020. The β€œcore” CPI was up 0.1% m-o-m, the smallest increase since August 2021. A few more of such data points will build the case for a lower discount rate for the S-REIT sector.
  • Other favourable data points are a broadening of growth for Singapore, resurfacing of loan demand and increased bond issuances by the sector.
  • Coupled with the fact that the S-REIT index is down ~9% year-to-date/12-month and underperforming the STI and other FTSE EPRA developed market indices (ex-HK), we think there is room for rotation into the sector.
  • - Read this at SGinvestors.io -
  • The S-REIT index is up ~6% from recent lows for a 7bps decline in yield. Comparatively, bottom-to-peak return in 4Q23 was 18% for a 70bps decline in yield.
  • We estimate every 50bps fall in the risk-free rate raises fair value by 10% on average. Some consolidation may be due while waiting for further moderation of inflation and movement in credit spreads.

June preview – distribution still under pressure

  • Read more at SGinvestors.io.




Above is the excerpt from report by Maybank Research.
Clients of Maybank Securities may be the first to access the full report in PDF @ https://www.maybanktrade.com.sg/.




Krishna Guha Maybank Research | Li Jialin Maybank Research | https://www.maybank-ke.com.sg/ 2024-07-15



Read More Analysis On Singapore REITs (S-REITs):
Analyst Reports on Singapore REIT Sector

Check Out Also The Summary Of:
S-REIT Share Price Performance
S-REIT Target Prices & Ratings





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