CapitaLand Integrated Commercial 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:

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

The S&P 500 fell by 4.2% last week, marking one of the worst weeks in recent years. The Dow Jones fell by 2.9%. Nasdaq, heavily weighted with tech stocks, dropped 5.6%. In contrast, the STI showed a slight gain of 0.3%.
The decline in the U.S. markets was influenced by disappointing U.S. non-farm payroll data for August, which added 142,000 jobs versus the expected 160,000. Additionally, the July number was revised downward, raising concerns about the U.S. labor market.
The upcoming Federal Reserve meeting on September 18 is anticipated to result in a 25 basis point rate cut. Investors also expect two further rate cuts in November and December, potentially reducing the Fed's benchmark rate by 1.25 percentage points by year-end.
U.S. government bond yields have fallen sharply, hitting a two-year low of 3.71%, down from 4.3% at the end of July and 4.6% earlier in the year.

STI Top performers:

STI worst performers:

CapitaLand Integrated Commercial Trust (CICT) announced the acquisition of a 50% stake in Ion Orchard.
Ion Orchard is a significant retail asset attracting substantial tourist traffic due to its prime location. Last year, Singapore welcomed 13.6 million tourists, with expectations to reach 15 to 16.5 million this year.
The acquisition will enhance CICT’s asset base, growing it to SGD 26.4 billion from SGD 24.5 billion. The retail component of CICT’s portfolio will increase to 35% from 30%, while office assets will slightly decrease to 37% from 39%. Integrated developments will make up 28% of the portfolio.
The acquisition is expected to increase CICT’s distribution per unit by approximately 0.9%. To finance the deal, CICT plans an equity fundraising of around SGD 1.1 billion, including a non-renounceable preferential offering and a private placement. The leverage ratio is anticipated to remain stable at about 40%.
The acquisition requires shareholder approval at an Extraordinary General Meeting (EGM). The EGM circular will be sent out soon, with the meeting expected to take place in late October or early November. If approved and the fundraising is completed, the acquisition could be finalised by the fourth quarter of this year.

Dow Jones Technical Analysis

Dropped 1% on Friday and has seen a significant decline over the past week.
It is now testing the 50-day exponential moving average at around 40,239 points.
The RSI is bearish, having crossed below the 50-point neutral mark, and the MACD shows a negative crossover.

S&P 500 Technical Analysis

Experienced a decline of 1.73% on Friday and 4.25% for the week.
It is approaching the 100-day moving average at 5,379 points.
The RSI is below the 50-point mark, showing no sign of a rebound and the index is showing negative MACD readings.

NASDAQ Composite Technical Analysis

Fell 5.77% over the past week, one of the worst drop since 2020.
The index dropped all the way to reaching the 200 days moving average before having a very strong rebound.
It's negative on the MACD, and much more negative on the RSI which is 7 points away from the oversold level of 30 points.
If the 30 point level in the RSI indicator is tested again, that could signal that an oversold situation and a technical rebound could happen around the level of the 200 days exponential moving average, which is now reading at 16,300 points level.

STI Technical Analysis

The STI recorded a slight gain of 0.3% despite declines in U.S. and regional markets.
The MACD is positive, but momentum may slow. There is a possibility of retesting the high in the July period at 3,509 points, but a breakout anytime soon is unlikely because momentum is residing.
The RSI for the STI is healthy at 63, but approaching the overbought level of 70. This suggests potential resistance around the July high of 3,509 points.

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