Mapletree Industrial Trust and Frasers Logistics & Commercial Trust in focus: Weekly Review with SIAS

What happened?

In this week's Weekly Market Review in partnership with Securities Investors Association Singapore (SIAS), we discuss key developments in the global equity market and also share more about Mapletree Industrial Trust and Frasers Logistics & Commercial Trust

Watch the video to learn more about what we are looking out  for this week.

Weekly Market Review

1:44 - Macro Update

• The US market saw further weakness, with the S&P 500 declining by 3.1% and the NASDAQ falling by 3.5%, led by sharp drops in major tech stocks like Tesla and NVIDIA.
• In contrast, Singapore’s STI outperformed with a 0.5% gain, climbing above 3,900.
• Market uncertainty has been driven by fluctuating US tariff policies, leading to weaker consumer sentiment and spending.
• Additionally, February’s non-farm payroll data came in weaker than expected, raising concerns about an economic slowdown.
• In response, investors have increased their expectations for US Federal Reserve rate cuts, anticipating a year-end Fed funds rate of 3.5–3.75%, implying three cuts totaling 0.75% from current levels.
• Consequently, bond yields have fallen, with the one-year US government bond yield dropping to 4% from a February high of 4.3%, reflecting growing economic concerns.

4:47 Singapore market updates

STI Top performers:

• ST Engineering
• UOL
• Sembcorp Industries
• SATS
• CapitaLand Integrated Commercial Trust

STI worst performers:

• DFI Retail Group
• Jardine C&C
• Genting Singapore
• City Dev
• CapitaLand Ascendas REIT

5:45 - Mapletree Industrial Trust

• Mapletree Industrial Trust (MIT) has seen its share price decline from $2.55 in September last year to around $2.00 despite reporting a 1.5% increase in distribution per unit (DPU).
• The weakness is driven by declining occupancy rates, with overall occupancy dropping to 92.1% as data centre occupancy rate, which makes up 56% of MIT’s portfolio, falls to 91.6%, driven by weakness in the North America with an occupancy rate of only 90.3%.
• Concerns have emerged over tenant renewals and the future demand for data centres, particularly with developments like China’s DeepSeek AI potentially reducing the need for large-scale computing power.
• To address these challenges, MIT is focusing on three strategies: reletting, engaging tenants ahead of lease expirations,  repositioning assets through redevelopment, and rebalancing by divesting non-core properties while expanding into new markets like Japan.
• Recently, they announced an acquisition of a mixed-use facility in Tokyo, including a data centre.
• MIT’s price-to-book ratio remains slightly elevated at 1.15 times compared to its historical average of 1.08 times.
• However, its dividend yield has risen to 6.5%, above its historical average, due to the share price decline.

Related Links:

• Mapletree Industrial Trust share price history and share price target
• Mapletree Industrial Trust dividend history and dividend forecasts

11:34 - Frasers Logistics & Commercial Trust 

• Frasers Logistics and Commercial Trust has seen its share price decline significantly since September, hitting a new 52-week low.
• Its portfolio consists of logistics, industrial, and commercial assets, with Australia as its largest market at 47% of the portfolio and Singapore at 13%.
• Unlike Mapletree Industrial Trust, Frasers Logistics and Commercial Trust reported a marginal 3.4% decline in its distribution per unit (DPU) for FY2024.
• The weakness in its portfolio is primarily in its commercial segment, with an occupancy rate of 85.5%, while logistics and industrial assets are nearly fully occupied.
• Singapore’s Alexandra Technopark has seen a drop in occupancy to 84.1% from 85.9% in September 2024.
• The REIT is mitigating this weakness by acquiring a prime logistics property in Singapore to strengthen its exposure to a more resilient sector.
• However, this acquisition has raised its leverage from 33% in September to 36.2% in December. Leverage also impacted by unfavourable currency movements, particularly from the Australian dollar, euro, and pound.
• Currently, Frasers Logistics and Commercial Trust trades at a price-to-book ratio of 0.74 times, below its historical average, while offering an attractive dividend yield of above 8%, which is relatively high for an industrial and commercial REIT.

Read also: 3 Blue-Chip Singapore REITs with Dividend Yields of Above 6%

Related Links:

• Frasers Logistics and Commercial Trust share price history and share price target
• Frasers Logistics and Commercial Trust history and dividend forecasts

18:30 - Technical Analysis

STI Technical Analysis

• The Straits Times Index (STI) remains stable despite a pullback from its all-time high of 3,951 points in February, currently holding above the 20-day moving average at 3,906 points.
• The index has been trending above the 20-day moving average since the start of the year, supported by strong performances from banks and industrial stocks like ST Engineering.
• However, momentum indicators suggest some weakness, with the MACD in negative territory and the RSI declining to 55, though still above the neutral 50 mark.
• If the RSI dips below 50, similar to what was observed in December, it could present a buying opportunity.
• Key support levels to watch are the lower Bollinger Band at 3,866 points and the 50-day exponential moving average at 3,852 points, with 3,850 serving as a crucial support level.
• Historically, rebounds have occurred when the STI touched the 50-day EMA, suggesting a potential turning point.
• Year-to-date, the STI is up 3%, outperforming U.S. indices, where the NASDAQ has entered correction territory, down over 10%, and the S&P 500 has fallen below 6,000, retreating 5% from the start of the year.

Dow Jones Technical Analysis

• The Dow Jones Index peaked in late January, a historically strong period due to positive bank earnings, but has since pulled back amid rising volatility.
• From February onward, concerns over trade tariffs and ongoing updates from the U.S. administration, particularly from Donald Trump, have unsettled investors, leading them to seek safety.
• The index initially found support at the 100-day EMA, which previously held in December, but recent trade tensions and weaker macroeconomic data, including a lower-than-expected non-farm payroll report , signaled an economic slowdown, pushing the Dow below this key support level.
• The index is now approaching the 200-day moving average at 42,028 points, which may serve as the next critical support level.
• Given that trade tensions are likely part of a negotiation strategy, uncertainty could persist for months.
• However, if the 200-day EMA holds, it may present an opportunity for accumulation until there is more clarity on economic conditions.

S&P 500 Technical Analysis

• The S&P 500 recently hit an all-time high on February 19 but has since pulled back about 5%, turning negative year-to-date.
• Last Friday, the index tested the 20-day EMA at 5,710 points and managed to close above it, suggesting that the 200-day EMA may still hold as support.
• However, technical indicators show continued downward momentum, with the MACD remaining negative, albeit fluctuating in strength.
• The RSI stands at 36, below the 14-day RSI-MA of 43, but has not yet reached oversold territory of 30, indicating potential for further downside.
• While the index remains in a downtrend, the 200-day EMA at 5,700 points is a critical support level to watch for signs of stabilisation.

Nasdaq Composite Technical Analysis

• The NASDAQ Composite Index has fallen over 10% from its December high, officially entering correction territory.
• It has breached the resistance of the 200-day EMA at 18,319 points, raising concerns that further declines could push it towards crash territory with a 20% drop.
• Futures indicate a 0.6% decline this Monday morning, suggesting further downside potential.
• While Friday saw a slight rebound, its continuation depends on upcoming CPI data. Technical indicators remain weak, with the RSI at 34 and the 14-day average at 40, nearing oversold levels.
• Traders may test stop-loss levels, potentially pushing the index toward 18,000 before a larger technical rebound occurs.

What to look out for this week

•  Wednesday, 12 March: US Consumer Price Index (CPI) data
• Thursday, 13 March: Singapore 6-month T-bill auction
• Friday, 14 March: US consumer confidence data

Get the full list of stocks with upcoming dividends here. 

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