Singapore Investment Themes - RHB Invest 2024-08-30: Stay Invested, Start Looking For Yields.

• We recommend that investors buy:
  1. A bit more aggressively into REITs, with a balance of high-quality industrial REITs for stable yields, office REITs (which we believe are undervalued), and selective overseas REITs;
  2. companies beyond REITs offering high and rising dividend yield;
  3. - Read this at SGinvestors.io -
  4. global industrials, banks with ASEAN exposure, and defensive stocks if Donald Trump becomes US President again; and
  5. bottom-up opportunities in the small-cap space.

Continue building exposure to the REITs sector

• Vijay, in his latest report Singapore REITs - Sunny Days Ahead; Stay OVERWEIGHT, noted that in the past cycles, Singapore REITs (S-REITs) have witnessed sharp rallies during turning points in interest rates. S-REITs’ share price performance has a high inverse correlation to risk-free rates, i.e. long-term treasury yields, with particularly high sensitivity at turning points of the cycle.
• - Read this at SGinvestors.io -
• We recommend investors adopt a slightly more aggressive stance, with a balanced mix of high-quality industrial REITs for stable yields, and office (which we believe are undervalued) and selective overseas REITs to ride on the rebound from the turn in the interest rate cycle. We remain selective on retail REITs amid softening signs in retail sales and valuation grounds, and turn neutral on the hospitality sector.
• S-REITs with slightly lower hedges of below 60% and higher gearing (slightly above 40%) will also likely see a pop in the near term, as these will be the immediate beneficiaries of rate cuts, as the impact will flow to the bottomline immediately.

Preferred S-REITs:

• Read more at SGinvestors.io.

Shekhar Jaiswal RHB Securities Research | https://www.rhbgroup.com/ 2024-08-30 SGinvestors.io

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