REITs rally with falling bond yields: Weekly Review with SIAS

What happened?

In this week's Weekly Market Review in partnership with Securities Investors Association Singapore (SIAS), we discuss the growing upward trend in the global equity market and also share more about the following:

• Astrea 8 bonds
• Keppel DC REIT

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

Weekly Market Review

2:02 - Macro Update

• The S&P 500 closed above 5,600, led by tech stocks with the NASDAQ rising 2.4% last week.
• The Dow Jones increased by 1.6%, while the Singapore stock market (STI) rose 2.6%, nearing 3,500.
• The US consumer price index fell compared to the previous month, boosting investor confidence that the Federal Reserve might cut interest rates soon.
• This month-on-month decline in inflation is the first in nearly four years, indicating potential control over inflation.
• US government bond yields fell further, with the 10-year yield declining to around 4.1%.
• Investors expect the Federal Reserve to keep rates unchanged in July, with a 90% probability of a rate cut in September, up from 70% previously. Another rate cut may follow in November.

5:02 - Singapore market updates

STI Top performers:

• SATS share price
• Thai Beverage share price
• Mapletree Pan Asia Commercial Trust share price
• Frasers Logistics & Commercial Trust share price
• CapitaLand Ascendas REIT share price

STI Worst performers:

• DBS share price 
• SIA share price
• Sembcorp Industries share price
• Jardine Cycle & Carriage share price
• Yangzijiang Shipbuilding share price

6:17 - Astrea 8 PE bonds

• Astrea 8 has launched a public offer of S$260 million of Class A-1 Bonds at a fixed interest rate of 4.35% per annum, and US$50 million of Class A-2 bonds at a fixed interest rate of 6.35% per annum. 
• Astrea 8 is backed by cash flows from a portfolio of 38 private equity funds that invested in 1,028 companies across diversified industries and geographies. 

Related links:

• Are Astrea 8 bonds worth buying?

13:11 - Keppel DC REIT

• Keppel DC REIT was the best-performing REIT last week. This rise in share price was driven by a general bounce in REITs and a company announcement regarding an acquisition.
• The REIT is acquiring a 98.5% stake in a Tokyo data centre for $201 million SGD, translating to an effective interest of $198 million SGD.
• This data centre boasts full occupancy and a 7-year weighted average lease expiry as a freehold asset completed in 2019.
• The acquisition is slated for completion in Q3 of this year, marking Keppel DC REIT's inaugural foray into Japan.
• Following the acquisition, Keppel DC REIT expects a 1.1% increase in distribution per unit on a pro forma basis, indicating positive investor sentiment and contributing to recent share price gains.

Related links:

• Keppel DC REIT share price history

16:36 - Technical Analysis

STI Technical Analysis

• STI is almost flat, down 2.5 points or 0.07% today. It briefly touched 3,500, reaching a high of 3,509 points.
• The next target is the 2018 high of 3,641 points, about 150 points away.
• The MACD shows a positive reading with a significant gap between the MACD line and signal line, indicating a continued uptrend.
• The RSI is currently overbought at 77, suggesting a potential for short-term profit-taking and market pullback.

Dow Jones Technical Analysis

• The Dow Jones Index closed above 40,000 last Friday, hitting a new all-time high of 40,257 points.
• It has a positive MACD reading with expanding uptrend momentum.
• RSI is overbought at 71, indicating a possible short-term retracement.

S&P 500 Technical Analysis

• The S&P 500 touched 5,600 points last week, closing at 5,615 points.
• MACD is showing subsiding momentum with positive values decreasing.
• RSI is overbought at 70, indicating potential for a short-term reversal.

NASDAQ Composite Technical Analysis

• The NASDAQ Composite Index experienced a significant fall last Thursday, down 1.95%, but rebounded 0.63% on Friday.
• Nvidia saw a sharp decline but quickly recovered, showing strong investor interest.
• MACD shows prominent convergence towards the signal line, indicating subsiding momentum.
• RSI dropped from 80 to 66, indicating a pullback and potential further decline towards the 50-point neutral mark.

What to look out for this week

• Monday, 15 July: Astrea 8 Management Presentation Live Event
• Tuesday, 16 July: SGX Academy Webinar: Retail Bond Research on Astrea 8 
• Wednesday, 17 July: Astrea 8 bonds application closing date
• Thursday, 18 July: Singapore 6-month T-bill auction
• Friday, 19 July: CSOP iEdge S-REIT Leaders Index ETF ex-div date

Check out the full list of Singapore stocks, REITs and ETFs with upcoming dividend payments with our dividend calendar.

Source: SGX, Bloomberg, Refinitiv

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