Singapore Reits – Strength Of balance sheet being tested
By SmallCapAsia  •  July 26, 2022
Excerpts from UOBKayHian report The rapid surge in interest rates affects Singapore Reits (S-REITs) who have not adequately hedged their cost of borrowings. We cut DCREIT’s 2023 DPU by 15% but upgrade the S-REIT to BUY after the recent 35% sell-off. MLT has only 11% of its borrowings exposed to rising interest rates. Stay invested in hospitality, retail and office REITs as reopening plays. BUY ART (Target: S$1.31), FCT (Target: S$2.74), FEHT (Target: S$0.77) and LREIT (Target: S$0.95). Maintain OVERWEIGHT.

The Fed’s renewed fervour to clamp down on inflation

The Fed has accelerated the tempo of interest rate hikes to quell inflationary pressures. It hiked the Fed Funds Rate by a massive 75bp to 1.50% after the FOMC meeting on 15 Jun 22. Based on the Fed’s dot plot, the median projected path for Fed Funds Rate would hit 3.4% by end-22 and 3.8% by end-23. The forecast translates...
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