Keppel DC REIT 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 alongside Keppel DC REIT and Digital Core REIT.

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

Weekly Market Review

1:55 - Macro Update

• The S&P 500 rose 3.4% and the NASDAQ gained 4.2% last week, both reaching new all-time highs, led by Nvidia.
• Market optimism was driven by easing Middle East tensions, hopes for trade deals, and cooling inflation.
• Investors now expect three Fed rate cuts this year—in September, October, and December—up from two previously.
• US bond yields fell, with the 10-year dropping to 4.25% and the 1-year below 4%; Singapore’s 10-year yield also continued its decline.
• Lower bond yields boosted REITs and SGX, which jumped 7.1% on IPO pipeline news and STI nearing all-time highs.
• Some earlier outperformers like ST Engineering saw profit-taking, while attention shifted to underperforming sectors like REITs.

STI Top performers:

• SGX
• Hongkong Land
• Thai Beverage
• DFI Retail Group
• Frasers Logistics & Commercial Trust

STI worst performers:

• ST Engineering
• Jardine Cycle & Cycle
• Yangzijiang Shipbuilding
• Seatrium
• Sembcorp

7:13 - Keppel DC REIT

• Keppel DC REIT was recently included in the Straits Times Index and its share price has rebounded to around $2.33, near its 52-week high.
• It is the largest data center REIT listed in Singapore, managing about $5 billion in assets.
• 81% of its portfolio is in Asia-Pacific, with Singapore accounting for 65% and Europe 19%.
• FY24 distribution per unit grew by 1.3% to 9.504 cents, supported by higher net property income despite rising finance costs.
• The REIT maintains a low aggregate leverage of 30.2% and a strong interest coverage ratio of 5.8x.
• Its strong performance is backed by robust data center fundamentals, with near 100% utilization in Singapore despite upcoming supply.

Related Links:

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

10:00 - Digital Core REIT

• Digital Core REIT has a $1.6 billion portfolio with assets in the US, Germany, and Japan, but none in Singapore.
• It serves over 100 customers, mainly hyperscalers and Fortune 50 tech companies.
• FY24 distribution per unit fell 2.7%, but second-half performance improved slightly with a 1.1% increase.
• It has a leverage at 38%, average debt cost of 3.8%, and an interest coverage ratio of 3.7%.
• Demand is supported by growing cloud and AI usage in North America; recent expansion includes a $413M asset in Japan.
• Backed by sponsor Digital Realty, it has a strong acquisition pipeline and is the only 100% freehold data centre REIT trading at a discount to book (0.7x).

Related Links:

• Digital core REIT share price history and share price target
• Digital core REIT dividend yield and dividend forecasts

15:58  - Technical Analysis

Straits Times Index

• The STI rose about 2% last week, bringing year-to-date gains to 4.5% and recovering most of April’s drop.
• Optimism around potential trade deals has helped markets shrug off concerns about upcoming US tariffs on July 9.
• The STI is now at 3,965, near the upper Bollinger Band, suggesting limited upside unless strong momentum continues.
• The psychological resistance level is around 4,000, where a pullback toward the 20-day moving average at 3,919 is likely.
• MACD indicators show a bullish crossover, confirming mid- to long-term uptrend; RSI at 65 indicates limited headroom before overbought conditions.
• Strong support levels are at 3,800, where the 50-day, 100-day, and Bollinger Band converge, with near-term support at 3,919.

Dow Jones Industrial Average 

• The Dow Jones gained last week, supported by ceasefire news, potential Middle East oil supply increases, and optimism over upcoming U.S. trade deals.
• Oil prices stabilized around $60–$70 per barrel, boosting market sentiment and reducing inflation concerns.
• The index reached the upper Bollinger Band at 43,523, with resistance levels ahead at 44,486 (Nov high) and 45,073 (all-time high).
• Key support lies at the 200-day moving average of 42,581, providing a strong technical base for potential pullbacks.
• MACD shows bullish momentum, suggesting the uptrend from late April is likely to continue into H2 2025.
• RSI is at 67, nearing the 70 overbought zone, signaling limited upside and potential short-term retracement once 45,000 is tested.

S&P 500 

• The S&P 500 hit a new all-time high at 6,187 points last Friday, closing slightly lower at 6,173.
• With no clear upper resistance, the index shows continued bullish momentum, but valuations are seen as stretched.
• MACD just turned positive, while RSI is at 70, signaling overbought conditions and potential for a near-term pullback.
• The first support level is at the 20-day moving average of 6,015, followed by the 6,000 psychological level.
• Lower Bollinger Band support is at 5,882, with the 200-day moving average at 5,829 providing strong long-term support.
• Any retracement to these key support levels could trigger technical buying, as seen in past rebounds.

Nasdaq Composite Index

• The Nasdaq hit a new all-time high, breaking past its previous December 2024 peak after a six-month wait.
• Valuations are stretched, with MACD turning positive last Friday, suggesting potential mid- to long-term strength.
• However, RSI is at overbought levels, signaling possible short-term weakness or a pullback.
• Key near-term support lies at the 20-day moving average of 19,610 points, where a recent bounce occurred.
• Major resistance is at 20,300 points, while strong long-term support sits at the 200-day moving average of 18,669 points.
• Sustaining the rally depends on upcoming earnings and macroeconomic data like non-farm payrolls.

What to look out for this week

• Tuesday, 1 July: Singapore Saving Bonds (SSB) application open
• Thursday, 3 July : 6 month T-bill auction, US jobs data

Get the full list of stocks with upcoming dividends here. 

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