Stocks and REITs rally with inflation easing: Weekly Recap

“How would you invest if you have $1 million today?”

This is a question I often get asked at various seminars and workshops. And a principle I would always share, is to make sure my portfolio is diversified.

This means that even for my bond investments, I would not put all my eggs in one basket.

This week, the launch of the Astrea 8 private equity (PE) bonds captured the attention of many investors. 

We dive deep into the Astrea 8 PE bonds to find out if it might be worthwhile applying for the bonds. 

With more options in the market, we share our thoughts on where to park our cash to earn a higher yield, comparing options such as T-bills, fixed deposits and SSBs. 

We also find out what to expect for the upcoming 6-month Singapore T-bill auction on 18 July with the sharp fall in US government bond yields. 

Lastly, if you do not have the time to review your portfolio regularly and allocate across various investment options, we explore how you can build your retirement nest egg with ease.

Happy growing!

Gerald, Founder of Beansprout

⏰ THIS WEEK IN MARKETS

❄️ INFLATION COOLS

What happened? 

The US consumer price index (CPI) in June fell by 0.1% compared to the previous month, as inflation eased across the board. 

This represents the first monthly decline in more than four years.

What does this mean?

The moderation in inflation provided investors with more confidence that the Fed will cut interest rates in September 

According to the CME Fedwatch Tool, investors are now assigning a 90% probability that the Fed will cut interest rates in September, rising from just over 70% a week ago. 

Why should I care? 

US government bond yields fell further, with the 10-year US government bond yield declining to about 4.2%.

US and Singapore stocks continued to rally with rising hopes of imminent rate cuts. 

In particular, Singapore REITs surged with gains led by Keppel DC REIT (+9.9%), Mapletree Pan Asia Commercial Trust (+8.9%), and Suntec REIT (8.4%).

To discover the best Singapore REIT for your portfolio, check out our REITs screener. 

🚗  MOVING THIS WEEK

• Keppel DC REIT has agreed to acquire a shell and core data centre in Tokyo, Japan for S$201 million. The acquisition is estimated to be completed in the third quarter, and will mark Keppel DC REIT’s maiden entry into Japan. Upon completion, the acquisition is expected to be 1.1% accretive to distribution per unit (DPU).
• Singtel and SK Telecom signed a memorandum of understanding to collaborate on building next-generation networks over the next two years.
• SGX June securities average daily volume and value fell 15% and 7%, respectively, over June 2023. Derivatives average daily trading volume was 13% higher year on year.
• Singapore Airlines (SIA) and Indonesian flag carrier Garuda Indonesia has received approval from the Competition and Consumer Commission of Singapore for a joint venture to collaborate on a range of commercial activities.
• SATS has restructured its gateway services business to form two new business units - Singapore Hub and Gateway Services Asia Pacific. The move reflects its decision to continue investing in Singapore, while scaling its international presence to capture growth opportunities overseas. 

Source: Bloomberg, CNBC, Business Times, Edge Singapore

💡 THE BIG IMPORTANT STORY

Are Astrea 8 bonds worth buying?

The Astrea 8 Class A-1 Bonds offer a fixed interest rate of 4.35% per annum, and the Class A-2 Bonds offer a fixed interest rate of 6.35% per annum.

🤓 WHAT WE’RE LOOKING OUT FOR THIS WEEK

• Monday, 15 July: Astrea 8 Management Presentation Live Event
• Tuesday, 16 July: SGX Academy Webinar: Retail Bond Research on Astrea 8 
• Wednesday, 17 July: Astrea 8 bonds application closing date
• Thursday, 18 July: Singapore 6-month T-bill auction
• Friday, 19 July: CSOP iEdge S-REIT Leaders Index ETF ex-div date

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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