CapitaLand Ascendas 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 with CapitaLand Ascendas REIT. 

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

Weekly Market Review

1:33 - Macro Update 

• As we enter the fifth week of the Iran war with no clear signs of stopping, escalating geopolitical tensions continue to drive intense market volatility. Global equities faced further pullbacks, with the S&P 500 dropping 2.1% to fall below the 6,400 level, while the tech-heavy Nasdaq led declines with a steep 3.2% drop.
• Oil prices remain the singular variable dictating market direction. Brent crude initially fell below $100 per barrel following reports of delayed US strikes, but prices rebounded sharply as the week progressed without any de-escalation.
• Consequently, inflation expectations are rising, and hopes for Federal Reserve rate cuts are effectively extinguished for the year. This triggered a massive spike in bond yields. The US 10-year government bond yield surged above 4.4%, while the Singapore 10-year government bond yield spiked from below 2% to 2.4% in just a month.
• Despite the global sell-off, the Singapore market remained notably defensive. The Straits Times Index declined only 1 %, remaining insulated by elevated interest rates supporting the banking sector and higher oil prices boosting energy-adjacent names.

• Sembcorp Industries emerged as a best performer, jumping 6 percent on surging oil prices. SGX and OCBC also stayed afloat, gaining 2% and 1% respectively, supported by heightened market volatility and higher-for-longer interest rate expectations.

• Conversely, surging 10-year bond yields triggered a REIT sell-down, with Keppel DC REIT, Frasers Logistics, and Mapletree Logistics falling between 4.1 and 5.6%.

STI Top Performers:

• Sembcorp Industries
• Singapore Exchange
• OCBC
• Singapore Airlines
• ST Engineering

STI Worst Performers:

• Keppel DC REIT
• Frasers Logistics and Comms Trust
• Singtel
• Yangzijiang Shipbuilding Hldgs
• Mapletree Logistics Trust

Company in Focus: Capitaland Ascendas REIT (SGX: A17U)

• CapitaLand Ascendas REIT shares slid from $2.90 to $2.50 recently, driven by broader REIT sector weakness and the announcement of a massive $1.4 billion portfolio acquisition.
• The company is acquiring three properties at a discount to their valuations, taking a 100% interest in a Singapore logistics asset for $500 million, a 50 percent stake in a Singapore business space, and a 49 percent stake in a newly built Japanese data centre.
• The strategic move demonstrates strong forward visibility by expanding its data centre and logistics exposure, boosting overall portfolio occupancy to 91.5%, and extending the weighted average lease expiry from 3.7 years to 4.3 years. The portfolio will also benefit from organic growth via built-in rent escalations of 1% to 2.5% per annum.
• Investors will see the REIT fund this through a $900 million equity fundraising exercise, split between a $600 million private placement and a $300 million non-renounceable offering. Management noted that aggregate leverage will remain healthy at 39.7%, and the acquisition is expected to be fully accretive to the distribution per unit.

Read also: Capitaland Ascendas REIT invests S$1.4 billion in Singapore and Japan assets

Technical Analysis

Straits Times Index

• The index is currently stabilizing around the 4,882 point pivot level, supported near the 20-day moving average.
• Immediate support rests securely at the 4,790 point level established in January.
• Momentum indicators show a neutral reading with the RSI at 48 and the MACD trending sideways.
• STI may remain range-bound trading in the near term with immediate upside resistance capping gains around the 4,900 level.

Learn more about the Straits Times Index (STI) here. 

Dow Jones Industrial Average

• The index has dropped 6 percent year to date, breaking below its crucial 45,500 support level last week.
• Downside momentum is accelerating, setting up a likely drop of another 2,000 points toward the August low of 43,300.
• While the RSI has dipped below the 30-point oversold mark, traders are waiting for confirmation of an upward reversal before calling a bottom.
• The downward trajectory of the MACD and its signal line confirms that further downside pressure remains dominant.

S&P 500

• The broad market index is down 7.4 percent year to date and closed at 6,368 points after breaking its November support.
• The index is currently hovering precariously on its September low and threatens to slide toward the 6,200 or psychological 6,000 level.
• The RSI has entered oversold territory but shows absolutely no sign of an impending technical recovery.
• Expanding negative divergence on the MACD signals a dangerous acceleration of downward momentum for the coming week.

Learn more about the S&P 500 index here.

Nasdaq Composite Index

• The tech index is the worst performer among the three majors, officially entering correction territory with a 10.8 percent year-to-date decline.
• After breaking the critical 21,000 support level last Friday, the index is on track to test the August low of 20,500.
• A failure to hold the 20,500 level would expose the index to a further slide toward the 20,200 level established in December 2024.
• Both the RSI and MACD indicate that downside momentum is worsening with no near-term relief in sight.

What to look out for this week

• Tuesday, 31 March: CapitaLand Ascendas REIT ex-dividend

• Wednesday. 1 April: Amova-StraitsTrading Asia ex Japan REIT ETF ex-dividend

• Friday, 3 April: US Non-farm payroll data

Get the full list of stocks with upcoming dividends here. 

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