Keppel DC REIT and Parkway Life 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 Keppel DC REIT and Parkway Life 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 reached an all time high, above the 5,800 level and getting close to 5,900. Nasdaq and the Dow Jones saw gains of 0.8% and 1.0% respectively.
• The STI closed at 3,640, representing a 1.8% gain.
• Retail sales in the US rose by 0.4% in the month of September, compared to the previous month. 
• In the third quarter of 2024, Singapore's economy grew by 4.1% compared to the previous year. China's GDP grew by 4.6% year on year.

4:31 - Singapore market updates

STI Top performers:

• Singtel
• SATS
• Yangzijiang Shipbuilding Holdings
• ST Engineering
• Thai Beverage

STI worst performers:

• CapitaLand Investment
• Jardine Cycle & Carriage
• Jardine Matheson
• Seatrium
• Genting Singapore

5:57 - Keppel DC REIT

• Share price rebounded since August due to anticipated Fed interest rate cuts and rose from $1.25 to nearly $1.50 before recent corrections due to rising bond yields.
• Portfolio occupancy remains strong at 97.6%, with rental reversions up to 40% in some assets.
• Recently acquired a data center in Japan, and its leverage is at 39.7% with a stable average debt cost of 3.3%.
• The REIT’s interest coverage ratio stands at a healthy 5.1 times. 
• Although its price to book valuation of 1.6 times is above its historical average, the current dividend yield of 4% is below the historical average.
• Gross revenue increased by 9% YoY to $76.9 million, while net property income remained flat YoY but rose compared to the previous quarter.

Read more: Keppel DC REIT DPU rises by 0.4%: Our Quick Take

Links:

• Keppel DC REIT share price history and share price target
• Keppel DC REIT dividend history and dividend forecasts

10:06 - Parkway Life REIT

• Share price recovered from August 2024, driven by expectations of Federal Reserve interest rate cuts. The price reached close to $4.20 in late September before settling around $4.01.
• Its asset mix includes hospitals and medical centres (67%) and nursing homes (33%). Geographically, assets are mainly in Singapore (67%), with Japan at 33% and a small portion in Malaysia (0.2%).
• Despite high occupancy rates, Parkway Life REIT experienced a 2.2% decline in gross revenue and 2.1% decline in net property income year-to-date, partly due to the weaker Japanese yen against the Singapore dollar.
• Finance costs increased slightly, though not as significantly as in other REITs. 
• The amount available for distribution rose by 2.8% due to positive adjustments, leading to an increase in distribution per unit to $0.113 from $0.1099 last year.
• Healthy gearing ratio of 37.5%, with a debt headroom of up to $590 million to reach a 50% gearing level, allowing room for future acquisitions.
• In August 2024, it acquired a nursing home in Japan for $21 million, slightly below its valuation.
• Overall, Parkway Life REIT continues to grow its distributions in 2024.
• Its price-to-book ratio exceeds the historical average, and the dividend yield is slightly lower than its historical average.

Related Links:

• Parkway Life REIT share price history and share price target
• Parkway Life REIT dividend history and dividend forecasts

15:20 - Technical Analysis

STI Technical Analysis

• Near a six-year high at 3,652 points, with year-to-date gains exceeding 12%.
• MACD indicates subsiding pullback and regaining uptrend momentum.
• RSI at 66, with potential to reach the 70 overbought level, aligning with the resistance level thesis.

Hang Seng Index

• Rose 3.6% following China’s central bank measures to support the economy.
• Holding at the 20,800 support level, with a next key level around 20,000.
• Negative MACD indicates continued downtrend momentum. RSI is at 55, suggesting weak uptrend momentum with potential consolidation at current levels.

Dow Jones Technical Analysis

• Reached an all-time high, marking the sixth consecutive weekly gain.
• RSI reading at 67 suggesting it could go into the oversold level very soon.
• Continued strong earnings could push RSI towards 80, indicating overvaluation.

S&P 500 Technical Analysis

• The S&P500 closed at 5,864 points, reaching a new all-time high.
• RSI at 65, with room to rise to the 70 overbought level.
• Key support levels to watch are the 20-day moving average at 5,767 and 50-day moving average at 5,664.

Nasdaq Composite Technical Analysis

• Near all-time high of 18,671, with a last close at 18,489 points.
• MACD indicates limited upward momentum. RSI is healthy at 63, indicating some room for growth but strong resistance at the all-time high level.
• Cautiously positive outlook due to resistance level constraint.

What to look out for this week

• Tuesday, 22 Oct: Mapletree Logistics Trust and Keppel REIT earnings
• Wednesday, 23 Oct: Singapore CPI data, Digital Core REIT and Tesla earnings
• Thursday, 24 Oct: Singapore 6-month T-bill auction, US initial jobless claims 
• Friday, 25 Oct: CapitaLand Ascendas REIT earnings 

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

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