Frasers Centrepoint 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 Frasers Centrepoint Trust:

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

Weekly Market Review

2:00 - Macro Update

• The S&P 500 closed above the 5,700 level, reaching an all-time high, while the Dow Jones recovered and increased by 1.6%. Nasdaq gained 1.5%.

• The STI went up to above 3,600 points with a 1.6% gain. 

• The US Federal Reserve cuts benchmark interest rates by 0.5%, the first cut in four years. Fed officials are projecting that there will be potentially another 0.5% cut for the rest of 2024 and a further 1% point cut in 2025. 
• The US 10-Year Government Bond Yield experienced a rebound to 3.7% after the Fed meeting, up from a low of 3.6%. This is due to Fed officials downplaying recession risks, suggesting a soft landing and increased long-term interest rate projections.
• The US 1-Year Government Bond Yield stabilised around 4%, showing no significant bounce post-Fed rate cut.
• The 10-year Singapore bond yield fell to a low of 2.41% on September 17 but rebounded to 2.46% post-Fed meeting. Shorter-term yields, like the six-month T-bill, continued to decline, closing at 3.07% on September 19.

10:56 - Singapore market updates

STI Top performers:

• DFI Retail Group
• Keppel Ltd
• Seatrium Ltd
• Sembcorp Industries
• Yangzijiang Shipbuilding

STI worst performers:

• Frasers Centrepoint Trust
• Mapletree Industrial Trust
• CapitaLand Ascendas REIT
• Frasers Logistics and Commercial Trust
• CapitaLand Integrated Commercial Trust

12:45 - Frasers Centrepoint Trust (FCT)

• FCT's share price  has come down from above $2.40 to $2.27 as of Friday last week. Last week, it was one of the top losers among REITs and STI stocks. 
• Committed occupancy remains high at 99.7% as of Q3 FY24 (ending June 2024), slightly down from previous quarters.
• Tenant sales grew by only 0.7% year-on-year in Q3 2024, a slowdown compared to 4.3% growth in the previous quarter. Shopper traffic also experienced a slowdown.
• Singapore's overall Retail Sales is still up by 1% year-on-year in July, but fell by 2.3% when excluding motor vehicles. The decline was driven by notable drops in department stores (11%), furniture and household items (5%), and apparel and footwear (10.3%).
• Resilient categories like supermarkets and hypermarts saw a growth of 1.8%.
• FCT's interest coverage ratio is comfortable at 3.3 times and average cost of debt remained unchanged at 4.2%. The leverage ratio stood at 39.1% as of 30 June 2024, slightly up but still below 40%.
• Price to book valuation is currently at 1.0x, and dividend yield is approximately 5.2%, both consistent with historical averages.

Related Links:

• Frasers Centrepoint Trust (FCT) share price history and share price target
• Frasers Centrepoint Trust (FCT) dividend history and dividend forecasts

18:45 - Technical Analysis

Dow Jones Technical Analysis

• The Dow Jones reached a new all-time high at 42,063 points.
• There is no previous price level guidance to look at, the next psychological resistance level could be 43,000 points.
• The MACD shows no signs of weakening in momentum and has been expanding upward in the positive territory. The RSI is four points away from the overbought level.

S&P 500 Technical Analysis

• The S&P 500 reached a new all-time high last week.
• The MACD has been expanding upward in the last two trading sessions, signaling that the uptrend momentum remains strong.
• The RSI also has a reading of 62.9, below the overbought level of 70, showing some room for the S&P 500 to go up higher. 

Nasdaq Composite Technical Analysis

• The Nasdaq lagged behind the other major U.S. indices as the premium on the tech stock now is at a very high level, and there's a rotation out of the tech stocks into the broader market, into the utility sector, into the consumer staples counters. 
• The Nasdaq has room to catch up further, to retest the all-time high again in July at 18,671 points.
• The MACD is still recording a positive reading and the RSI, although the weakest reading among the three indices is at 59 points, a very healthy reading.

STI Technical Analysis

• The STI is up about five points on the morning of September 23rd and is currently at a multi-year high.  The STI gained more than 10% since the low observed in the first week of August. 
• The next resistance level  could be the previous high at 3,641 points.
• The MACD is positive, but momentum is weakening, with the MACD line converging toward the signal line. A crossover could signal a potential change in direction.
• The RSI is currently at 77, indicating overbought conditions, similar to what was observed in July.

What to look out for this week

• Monday, 23 Sep: Singapore inflation data
• Tuesday, 24 Sep: CapitaLand Integrated Commercial Trust (CICT) preferential offering closing date
• Wednesday, 25 Sep: Singapore Savings Bond (SSB) application closing date
• Thursday, 26 Sep: Singapore 6-month T-bill auction
• Friday, 27 Sep: US Personal Consumption Expenditure (PCE) data

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

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