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iEdge S-Reit Index Weekly Review 11 Mar 24

Good day everyone. How have you been? Hope you are doing well.

Some relief came as we saw some buying pressure towards the end of the week. Lets explore this.

Singapore Real Estate Investment Trust (S-REIT) Sector Developments for the week

The Business Times reported that elevated borrowing costs continued to impact the distributions of S-REITS during the latter half of 2023. Over 3/4 of the trusts that reported their distribution (DPU) saw declines. This is compared to only 6 S-REITS that increased their DPU and 2 reporting flat.

I mentioned previously that the higher for longer interest rate environment is going to exert a drag on the sector. We are seeing it manifest.

In a testimony, Federal Reserve Chair Jerome Powell mentioned that while inflation is not quite tamed rate cuts can be expected this year. The US Unemployment Rate also turned out higher than expected at 3.9%, prompting more speculation of an upcoming easing of interest rates. 

While the expectation of upcoming interest rates may provide relief, I remain cautious as nothing matters expect for the actual interest rate cut itself.



In the chart above, we see that the inverse correlation between the iEdge S-Reit Index (blue) and US 10-Year Treasury Bond Yield (orange) continues as the REITs index finally bounces up from a support region.

Having said so, this may not be the sole factor. We also observe the STI Index climbing which likely added to the positive sentiments for the sector.

The Straits Times Index (STI) tracks the performance of the top 30 companies listed on SGX and it is an approximation of the general sentiment of the Singapore market. Towards the end of the week, it likely tracked global indexes higher as investors react to the possibility of easing inflation as seen from the US economic data.

The week ahead brings us a number of important US Economic Data which includes:

Consumer Price Index (CPI), which is a way to track how the prices of common goods and services, like groceries and rent, change over time. It shows whether living costs are increasing or decreasing, helping us understand the overall trend in expenses for households.

Producer Price Index (PPI), which measures the change over time in the selling prices received by domestic producers for their output. It’s like a gauge for the cost of goods before they reach consumers, indicating whether producers are paying more or less for the materials and services they use to make products. This can affect the prices consumers will eventually pay.

Retail Sales, which tracks the total amount of money spent by consumers at stores, online, and through other sales venues on a wide range of products like clothing, electronics, and groceries. It’s a measure of consumer spending, showing how willing or able people are to spend money on goods, which can reflect the overall health of the economy.

Unemployment Claims, which reports the number of people who have filed for government assistance because they’ve lost their jobs and are looking for new employment. It’s a key indicator of how many people are currently out of work and seeking support, reflecting the health of the job market and the economy.

These will shape the perception of the US Federal Reserve officials and investments which in turns results in market moves. It will be good to be kept informed.

Here are the latest dividend received for my portfolio. You can view the latest holdings and prices using the menu bar below.

11 Mar 24 – Dividend from Keppel DC REIT 909.72
7 Mar 24 – Dividend from Mapletree Ind Tr 378.47
6 Mar 24 – Dividend from CapitaLand Ascendas REIT 286.41

In the meanwhile, I continue to invest into CSOP iEdge SREIT ETF weekly to maintain exposure to the market and average down my overall cost.

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