CICT and Digital Core REIT 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 Digital Core REIT and CICT:

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

Weekly Market Review

2:10 - Macro Update

• The S&P500 surged 4%, now back to above the 5600 levels.
• NASDAQ gained 5.9%, driven by AI-related stocks like Nvidia. 
• The STI hit a 6-year high, closing above 3,500 points multiple times.
• The US Consumer Price Index (CPI) showed 2.5% inflation in August, the lowest in over a year. Markets now expect the Federal Reserve to cut interest rates, with a 61% probability of a 0.5% rate cut.
• US and Singapore bond yields dropped, with the US 10-year yield at 3.65%.

4:44 - Singapore market updates

STI Top performers:

• Sembcorp Industries
• ST Engineering
• Seatrium
• Singtel
• OCBC

STI worst performers:

• Hongkong Land
• Frasers Centrepoint Trust
• DFI Retail Group
• CapitaLand Integrated Commercial Trust
• ThaiBev

6:46 - Digital Core REIT

• Digital Core REIT’s net property income declined by 13.4% in the first half of 2024. Distribution per unit fell 6.3%, yielding 6.3% annualized.

• The aggregate leverage is fairly low at 34.4% and the average cost of debt about 4.1%. 

• In terms of the valuation, Digital Core REIT is now at about 0.83 times price to book which is just about in line with the historical average and the distribution yield 6.3% is actually lower than the last 2 years.

• Digital Core REIT will acquire a further interest of between 0.2% on 40% of a Frankfurt data center that it currently already has a 49.9% stake in. Depending on whether it acquires 0.2% or the maximum of 40%, the acquisition cost is estimated at up to $213 million. 

• This would strengthen relationships with Fortune 50 and Fortune 25 tech companies and the REIT's reliance on North American rent contributions will decrease from 65.8% to potentially as low as 54.3%. 

• The deal is projected to enhance the REIT’s distribution yield by approximately 1.7%, assuming an additional 10% stake is acquired.

Related links:

• Digital Core REIT share price history and share price target
• Digital Core REIT dividend history and dividend forecasts

12:30 - CICT

• The share price of CapitaLand Integrated Commercial Trust (CICT) has rebounded from the lows due to the expectations of the interest rate cuts and more recently there has been some volatility due to the announcement of the acquisition of ION Orchard as well as the preferential offering. 

• Existing shareholders the right to buy 56 new units for every 1,000 old units held at $2.007 per unit. This preferential offering will raise about S$760 million, helping to fund the acquisition of the 50% stake in ION Orchard.

• The preferential offering has already opened on the 16th of September. It will close on the 24th of September and the expected date of crediting of the preferential offering units and the trading of the units is expected to start on the 2nd of October.

Read here: CICT Preferential Offering - What should unitholders do?

16:02 - Technical Analysis

Dow Jones Technical Analysis

•  The Dow Jones index had a new record close at an all-time high close of 41,622 points.
• The MACD has turned positive and the RSI is reading at 62 on Monday close which is a healthy reading, below the 70 point overbought mark. 

S&P 500 Technical Analysis

•  The S&P 500 closed at 5633 points yesterday after Monday night close, which is 40 points away from the all-time in the middle of July at 5669 points.
• The MACD reading has also turned positive in the last two trading sessions.
• The RSI has a reading of 58, above the 50-point neutral mark, indicating that there's positive momentum in the uptrend since the beginning of September.

NASDAQ Composite Technical Analysis

• The Nasdaq Composite closed at 17,592 points on Monday night.
• The MACD reading is positive and the RSI is at the 54 point reading. Although it is above the 50 point neutral mark, indicating positive momentum, it is not as  strong as the two other previous US indices. 

STI Technical Analysis

• The STI index is now at a new year to date high of 3,593 points.
• The MACD is on a very strong uptrend trajectory since the beginning of August after the pullback caused by the unwinding of the Japanese yen. Momentum does not seem to be subsiding the positive reading seems to be able to sustain going forward before hitting the next resistance level which is 3,641 in 2018. 
• The RSI indicator has also breached above the 70 point mark

What to look out for this week

• Tuesday, 17 Sep: US Retail Sales
• Thursday, 19 Sep: US Federal Reserve Meeting

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

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