Stocks slide amid rising bond yields: Weekly Market Recap

One of my friends recently shared that his New Year resolution was to take better care of his finances, and his first question to me was—how do I start?

For me, it always begins with savings. First, making sure we have enough emergency cash, and second, ensuring our savings are earning a competitive interest rate.

If you're wondering where to park your cash, check out our comparison of T-bills, fixed deposits, and savings accounts to see how you can maximise your savings. 

With fixed deposit rates falling in January, T-bills now look more attractive with a cut-off yield of 3.05% in the previous auction. We explore what to expect from the upcoming T-bill auction on 16 January.

Lastly, whether you're an experienced investor or just getting started, we'd love to hear your thoughts! We've extended our Investor Pulse Survey and would greatly appreciate a few minutes of your time to share what you’d find most helpful.

Looking forward to hearing from you!

Gerald, Founder of Beansprout

⏰ This Week In Markets

📈 Bond yields soar

What happened? 

The US economy added 256,000 jobs in December, significantly exceeding market expectations of 155,000.

This robust job growth pushed the unemployment rate down to 4.1%. 

What does this mean?

The stronger-than-expected employment data underscored the resilience of the US economy, despite ongoing concerns about the impact of elevated interest rates.

In response, investors scaled back their expectations for sharp Fed rate cuts in 2025. According to the CME FedWatch Tool, markets now anticipate only one additional rate cut, likely in June.

Why should I care? 

US government bond yields climbed, with the 10-year yield hitting 4.77%, its highest level since 2023.

Meanwhile, US stocks declined as concerns over the impact of elevated interest rates weighed on investor sentiment.

With the bounce in bond yields, the 10-year average interest rate on the next Singapore Savings Bond is expected to rise to above 3%, based on our projections as of 12 January. 

Singapore REITs fell with higher bond yields, with losses led by Mapletree Pan Asia Commercial Trust and Mapletree Logistics Trust. 

🚗  Moving This Week

• Gordon and Celine Tang, through their vehicle Aelios, have increased their offer for units in Suntec REIT to $1.19 per unit. Unitholders who have accepted their previous offer are also entitled to the revised offer price once the offer becomes or is declared unconditional in all respects. Read more here.
• Mapletree Logistics Trust (MLT) is divesting a property in Malaysia for RM 31.5 million (S$9.6 million), 31.3% above value. The divestment is expected to be completed in the first half of FY2025/2026, with no material impact on MLT’s net asset value and net property income for the current financial year. Read more here
• Manulife US REIT announced that its portfolio value has been deemed to drop 9.3% or US$116.6 million to US$1.14 billion. Besides tenants downsizing, the lower value was also driven by higher discount rates and terminal capitalisation rates for certain properties. Read more here.
• SingPost has cautioned that while it has in place a divestment strategy to monetise its various non-core assets and businesses, there is "no certainty" that any of the previously flagged transactions will take place. Read more here
• Centurion announced that it is exploring establishing a REIT which will comprise some of the group’s workers and student accommodation assets. The proposed REIT will be sponsored by Centurion and listed on the Mainboard of the SGX.

Source: Bloomberg, CNBC, Business Times, Edge Singapore

💡 The Big Important Story

Will the T-bill yield rise further in the auction on 16 Jan?

The closing yield on the 6-month Singapore T-bill was at 3.03% on 10 January.

🤓 What we're looking out for next week

• Wednesday, 15 Jan 2025: US Consumer Price Index (CPI) data
• Thursday, 16 Jan 2025: Singapore 6-month T-bill auction
• Saturday, 18 Jan 2025: FSM Invest Expo 2025 

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

Source: SGX, Bloomberg, Refinitiv

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