A few hours ago, Fed Chair Jerome Powell on Friday gave a tepid indication of possible interest rate cuts ahead. The US Fed interest rate cuts will lower the SOFR rate that US borrowers on.
In Singapore, it will not translate to interest savings for most SGX listed REITs. This is because most of the REITs are on debts tied to the SORA (Singapore) and Japan's. As a matter of fact, SORA (Singapore's rate) has fallen faster than USA's. While USA's SOFR has not decreased by a single decimal throughout the year, Singapore's SORA has fallen by 1.5%.
Only Beneficary
The main beneficary are the US listed REITs because almost all their loans are tied to US SOFR instead of SORA unlike the rest. In time to come, we can expect the decline in US Federal Reserve Rate to benefit them.
KORE is the most sensitive to movement of SOFR because
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