Singapore REITs Monthly - Phillip Securities 2024-09-23: Rate Cut Fuelled Rally

• The S-REITs Index advanced 4.2% in August, building on its 5.4% rally from July.
  • The top performer for the month was Keppel Pacific Oak US REIT (SGX:CMOU), gaining 30%, while the worst performer was ARA US Hospitality Trust (SGX:XZL), falling 23.3% after weak 1H24 results.
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• The Fed lowered its benchmark rate by 50bps on 18 September 2024 to a target range of 4.75%-5%, the first reduction since March 2020. According to our sensitivity analysis, every 100bps decrease in interest rates will improve S-REITs DPU by ~5% on average. S-REITs share prices are now trading at a forward dividend yield spread of ~3.3% (-1x standard deviation) and a P/NAV of 0.93x (-1.1x standard deviation).
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• Catalysts are expected from a pick-up in the economy, asset recycling, and more interest rate cuts.

S-REIT sector round-up

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Darren Chan Phillip Securities Research | Liu Miaomiao Phillip Securities | https://www.stocksbnb.com/ 2024-09-23 SGinvestors.io

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