Reits Benefit from Anticipated Pause in US Rate Hikes
Singapore shares closed higher on Friday, February 3, supported by gains in real estate investment trusts (Reits) amid expectations of a halt to US Federal Reserve interest rate increases. The Straits Times Index (STI) rose by 0.6% or 20.61 points to end at 3,384.29. Trading activity saw 2.2 billion securities worth S$1.4 billion change hands, with losers (306) slightly outpacing gainers (281).
Market Dynamics
Market analyst Yeap Jun Rong from IG highlighted that local banks faced pressure on Thursday due to softened rate hike expectations. However, renewed momentum in the Reits sector provided stability to the STI, as investors viewed a potential end to the rate hiking cycle positively.
Reits Drive Gains
Reits were the standout performers on Friday. Leading the index gainers were:
Frasers Logistics and Commercial Trust: Rose 4.6% to close at S$1.36.
Mapletree Logistics Trust: Gained 2.3% to end at S$1.76.
CapitaLand Ascendas Reit: Increased by 2% to S$3.
Banking Sector and Other Performers
The trio of local banks posted gains:
DBS: Up 1.2% to S$35.50.
UOB: Advanced 1.8% to S$30.16.
OCBC: Rose 0.9% to S$13.
However, Keppel Corp was the day’s largest loser, falling 5.1% to S$7.26. This drop followed its announcement on Thursday of a 40.6% decline in net profit for the second half of 2022, attributed to reduced revenue from continuing operations.
Regional Performance
Across the region, stock market performance was mixed:
Nikkei 225: Gained 0.4%.
Kospi Composite Index: Rose by 0.5%.
FTSE Bursa Malaysia KLCI Index: Inched up 0.04%.
Hang Seng Index: Declined 1.4%.
The robust performance of Reits and select financial stocks helped support Singapore’s market, while regional indices displayed varied results amid ongoing global economic uncertainty.
