CapitaLand China Trust, CapitaLand Investment 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 CapitaLand China Trust, CapitaLand Investment, Sasseur REIT, and Wilmar.

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

Weekly Market Review

1:40 - Macro Update

• The S&P 500 closed above the 5,700 level, while the Dow Jones and Nasdaq increased by 0.6% and 1% respectively.

• The STI closed below the 3,600 points with a 1.4% decline. 

• The US Personal Consumption Expenditure (PCE) rose 2.2% in August, reinforcing investor's confidence that inflation is coming down and the FED will continue cutting interest rates.
• The Singapore 6-month T-bill cut-off bond yield fell to 2.97%, the first time it has fallen below 3% since September 2022. This reflects the fall in global bond yields following the US interest rate cut.

3:31 - Singapore market updates

STI Top performers:

• DFI Retail Group
• Wilmar International Ltd
• CapitaLand Investment
• Mapletree Pan Asia Commercial Trust
• Frasers Centrepoint Trust

STI worst performers:

• Yangzijiang Shipbuilding
• Singtel
• DBS
• SATS Ltd
• OCBC 

5:25 - Chinese Stimulus Measures

• The Chinese government announced a slew of stimulus measures to boost the Chinese economy. 
• The People’s Bank of China (PBOC) cut its reserve requirement ratio by 50 basis points for most banks, increasing liquidity in the market.
• Chinese officials also committed to stabilise the country’s property market and make real estate prices “stop declining,”.
• The Chinese government also announced a one-off cash handout to those living in extreme poverty.

7:09 - CapitaLand China Trust

• Strong bounce last week (+15%) due to the Chinese stimulus measures and increased interest in Singapore REITs.
• Singapore's first and largest China-focused REIT with 18 properties valued at S$4.8 billion across 12 cities. Its portfolio includes 9 retail malls, 5 business parks, and 4 logistics parks.
• 1H 2024 Performance: Net property income declined by 4.9%, mainly due to industrial property weakness. Distribution per unit (DPU) down 19.5%, impacted by currency movements (weaker Chinese yuan) and higher withholding taxes.
• Retail properties: Slight improvement in shopper traffic and tenant sales; gross revenue decreased by 0.3%.
• Logistics properties: Weaker occupancy and rentals led to a 2.3% drop in gross revenue.
• Gearing ratio steady at 40.8% as of June 2024.
• Average cost of debt slightly increased to 3.49% from 3.47%.
• Current dividend yield is about 7%, slightly below the historical average.

Related Links:

• CapitaLand China Trust share price history and share price target
• CapitaLand China Trust dividend history and dividend forecasts

11:50 - Sasseur REIT

• Specialises in China-focused outlet malls valued at 8.5 billion Chinese yuan as of June 2024.
• 1H 2024 Performance: Outlet sales down slightly by 4%. Stable occupancy rate of 98%. Distribution per unit (DPU) fell by 5%, a smaller decline compared to CLCT.
• Aggregate leverage is low, at 25% as of June 2024. Valuation at 0.84 times price-to-book, close to the historical average. 

Related Links:

• Sasseur REIT share price history and share price target
• Sasseur REIT dividend history and dividend forecasts

13:50 - CapitaLand Investment

• The share price of capital land investment increased from about $2.50 per share in August to now above $3. 
• Price-to-book ratio of about 1.5x which is close to its historical average valuation.
• Watch our previous Weekly Market Review discussing CapitaLand Investment's latest earnings. 

Related links:

• CapitaLand Investment share price history and share price target
• CapitaLand Investment dividend history and dividend forecasts

14:32 - Wilmar

• Wilmar, a major constituent of the STI, saw notable gains last week, breaking out from its $3–$3.20 trading range to almost $3.40.
• Wilmar has significant exposure to China and is one of the world’s largest consumer food markets, primarily through its entity Yihai Kerry Arawana (YKA)
• They are the leading company in consumer-packed edible oils, rice, and flour in China. Major operations include refining edible oils and crushing oil seeds.
• 1H 2024 Performance: Profit Before Tax (PBT) grew by 6% year-on-year, driven by growth in food products, feed, and industrial products, despite weaker consumer demand in China. This profit growth helped offset weakness in other areas like plantations and sugar milling.
• Earnings Per Share (EPS) also increased by 6%.
• Declared an interim dividend of 6 Singapore cents.

Related Links:

• Wilmar share price history and share price target
• Wilmar dividend history and dividend forecasts

19:02 - Technical Analysis

Dow Jones Technical Analysis

• The Dow Jones Index hit a new all-time high at 42,628 points and a new all-time close at 42,313 points.
• MACD reading is still positive, however, the uptrend momentum is weakening.
• The RSI is at 66, nearing the overbought level of 70, signaling a possible correction or pullback.

S&P 500 Technical Analysis

• Last Thursday, the S&P 500 reached a new all-time high at 5,767 points and set a new all-time close the same day.
• Positive MACD reading, but the momentum has weakened over the last three trading sessions.
• RSI is at 64, six points below the 70 overbought level, suggesting a near-term peak and the possibility of a technical pullback.

Nasdaq Composite Technical Analysis

• No new all-time high last week, currently 3% below the 10 July all-time high. Further upside potential remains, with the possibility of retesting the all-time high.
• MACD is still positive, but momentum has slightly weakened over the past few trading sessions, remaining neutral.
• RSI at 61 is below the 70-point overbought level, allowing for more upward movement before hitting a peak. The 14-day moving average on the RSI could push the reading closer to the overbought level in the coming weeks.

STI Technical Analysis

• STI reached a new year-to-date high in the early part last week at 3,652 points. 
• The next support level will be the 20 days moving average, which is now at the 3,554 points level.
• MACD is weakening and had a crossover, suggesting it's going into a downtrend movement.
• RSI indicator hit the overbought level, indicating the possibility of a technical pullback or technical correction.

What to look out for this week

• Monday, 30 Sep: China Purchasing Managers Index (PMI) data
• Tuesday, 1 Oct: Singapore Savings Bond application open date, Nike earnings
• Friday, 4 Oct: US Nonfarm Payroll data

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