SGX Market Strategist, Equity & Fixed Income, Singapore Exchange Ltd (SGX)

Geoff Howie

SGX Market Strategist, Equity & Fixed Income

Asia’s leading multi-asset exchange

Singapore Exchange Ltd (SGX)

Singapore Exchange is Asia’s leading and trusted market infrastructure, facilitating the exchange of capital and ideas to create value for people, businesses and economies. As a multi-asset exchange operating equity, fixed income and derivatives markets to the highest regulatory standards, SGX is a vertically integrated business that provides listing, trading, clearing, settlement, depository and data services.

With about 40% of listed companies and over 80% of listed bonds originating outside of Singapore as well as established linkages across the region and in Europe, SGX is Asia’s most international and connected exchange. Offering a full suite of derivatives products across Asian equity indices, commodities and currencies, SGX is the world’s most liquid international market for the benchmark equity indices of China, India, Japan and ASEAN.

As Asia’s pioneering central counterparty, SGX is globally recognised for its risk management and clearing capabilities, and was one of the first globally to adopt the Principles for Financial Market Infrastructure.

Headquartered in AAA-rated Singapore, SGX has over 800 employees including offices in Beijing, Chicago, Hong Kong, London, New York, Mumbai, San Francisco, Shanghai and Tokyo.

Equity Bottom-Up

<ul><li>SINGAPORE-LISTED real estate investment trusts (S-Reits) continue to hold up despite decelerating global growth, with the iEdge S-Reit Index generating 2.1 per cent in total returns in the first half of 2023, outperforming the Straits Times Index’s 1.2 per cent and the FTSE EPRA Nareit Asia ex Japan Index’s -1.7 per cent.</li><li>The 10 S-Reits were Keppel DC Reit, Cromwell European Reit (Cromwell E-Reit), Frasers Logistics & Commercial Trust, Frasers Hospitality Trust, Paragon Reit, Frasers Centrepoint Trust, Aims Apac Reit, ParkwayLife Reit, CapitaLand India Trust, and CapitaLand Ascott Trust.</li><li>Outperformance was driven across specialised, healthcare and hospitality sub-sectors at 7.5 per cent, 5.2 per cent, and 4.1 per cent total returns respectively.</li></ul>

SINGAPORE-LISTED real estate investment trusts (S-Reits) continue to hold up despite decelerating global growth, with the iEdge S-Reit Index generating 2.1 per cent in total returns in the first half of 2023, outperforming the Straits Times Index’s 1.2 per cent and the FTSE EPRA Nareit Asia ex Japan Index’s -1.7 per cent.The 10 S-Reits were Keppel DC Reit, Cromwell European Reit (Cromwell E-Reit), Frasers Logistics & Commercial Trust, Frasers Hospitality Trust, Paragon Reit, Frasers Centrepoint Trust, Aims Apac Reit, ParkwayLife Reit, CapitaLand India Trust, and CapitaLand Ascott Trust.Outperformance was driven across specialised, healthcare and hospitality sub-sectors at 7.5 per cent, 5.2 per cent, and 4.1 per cent total returns respectively.

REIT Watch - 10 S-Reits which outperformed in H1

<ul><li>Retail investors continued to be a key driver in S-REITs fund flow activities in H1 2023, accumulating net retail inflows of S$389 million, while institutional investors saw net outflows of S$485 million.</li><li>A similar trend was seen a year ago during H1 2022 when the sector booked S$443 million of net retail inflows and S$360 million net institutional outflows.</li><li>By sub-segments, data centre S-REITs received the most institutional net inflows and retail net outflows in H1 2023, at S$26 million and S$43 million respectively.</li></ul>

Retail investors continued to be a key driver in S-REITs fund flow activities in H1 2023, accumulating net retail inflows of S$389 million, while institutional investors saw net outflows of S$485 million.A similar trend was seen a year ago during H1 2022 when the sector booked S$443 million of net retail inflows and S$360 million net institutional outflows.By sub-segments, data centre S-REITs received the most institutional net inflows and retail net outflows in H1 2023, at S$26 million and S$43 million respectively.

REIT Watch - Retail investors net bought S$390m of S-REITs in 1H2023

<ul><li>10 S-Reits with lowest gearing ratios A key metric for Reits is the gearing ratio, also known as aggregated leverage, which is a metric closely monitored by investors and often used to access a Reit’s financial leverage.</li><li>As of end-February this year, the 40 actively traded S-Reits and Property Trusts had an average gearing ratio of 37.7 per cent, below the regulatory limit of 50 per cent if the minimum interest coverage ratio (ICR) is at least 2.5 times, imposed by the Monetary Authority of Singapore (MAS).</li></ul>

10 S-Reits with lowest gearing ratios A key metric for Reits is the gearing ratio, also known as aggregated leverage, which is a metric closely monitored by investors and often used to access a Reit’s financial leverage.As of end-February this year, the 40 actively traded S-Reits and Property Trusts had an average gearing ratio of 37.7 per cent, below the regulatory limit of 50 per cent if the minimum interest coverage ratio (ICR) is at least 2.5 times, imposed by the Monetary Authority of Singapore (MAS).

REIT Watch – 10 S-REITs with lowest gearing ratios average 32% gearing

ARA US Hospitality Trust / Equity Bottom-Up

<ul><li>Of the 30 S-REITs which have declared full year 2022 distributions, median change in distribution per unit (DPU) increased marginally by 0.2 per cent year-on-year (y-o-y).</li><li>The five trusts with the highest y-o-y DPU increments for FY22 are: ARA US Hospitality Trust (760 per cent), Paragon REIT (34 per cent), CDL Hospitality Trusts (32 per cent), CapitaLand Ascott Trust (31 per cent) and Far East Hospitality Trust (24 per cent).</li><li>CDL Hospitality Trusts (CDLHT) declared a DPS of 5.63 Singapore cents for FY22, up 31.9 per cent y-o-y.</li></ul>

Of the 30 S-REITs which have declared full year 2022 distributions, median change in distribution per unit (DPU) increased marginally by 0.2 per cent year-on-year (y-o-y).The five trusts with the highest y-o-y DPU increments for FY22 are: ARA US Hospitality Trust (760 per cent), Paragon REIT (34 per cent), CDL Hospitality Trusts (32 per cent), CapitaLand Ascott Trust (31 per cent) and Far East Hospitality Trust (24 per cent).CDL Hospitality Trusts (CDLHT) declared a DPS of 5.63 Singapore cents for FY22, up 31.9 per cent y-o-y.

REIT Watch – Hospitality S-REITs’ DPU rebound 32% in 2022

<ul><li>Retail S-REITs’ metrics surpass pre-Covid; poised to benefit from tourism boost The Singapore Tourism Board expects the nation to receive up to 14 million international visitors this year, more than double the 6.3 million recorded in 2022.</li><li>Mapletree Pan Asia Commercial Trust’s VivoCity Mall reported that its Q3 FY22/23 sales continued to exceed pre-pandemic levels, with shopper traffic and tenant sales growing 50.5 per cent and 38.5 per cent yoy, respectively.</li></ul>

Retail S-REITs’ metrics surpass pre-Covid; poised to benefit from tourism boost The Singapore Tourism Board expects the nation to receive up to 14 million international visitors this year, more than double the 6.3 million recorded in 2022.Mapletree Pan Asia Commercial Trust’s VivoCity Mall reported that its Q3 FY22/23 sales continued to exceed pre-pandemic levels, with shopper traffic and tenant sales growing 50.5 per cent and 38.5 per cent yoy, respectively.

REIT Watch – Retail S-REITs’ metrics surpass pre-Covid; poised to benefit from tourism boost

Singapore

PARAGON REIT is a Singapore-based REIT established principally to invest, directly or indirectly, in a portfolio of income-producing real estate which is used primarily for retail purposes in Asia-Pacific, as well as real estate-related assets.

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Paragon REIT (PGNREIT SP)

REIT Watch - 10 S-Reits which outperformed in H1

SINGAPORE-LISTED real estate investment trusts (S-Reits) continue to hold up despite decelerating global growth, with the iEdge S-Reit Index...

Singapore Exchange Ltd (SGX)

REIT Watch - Retail investors net bought S$390m of S-REITs in 1H2023

Retail investors continued to be a key driver in S-REITs fund flow activities in H1 2023, accumulating net retail inflows of S$389 million, while...

Singapore Exchange Ltd (SGX)

REIT Watch – 10 S-REITs with lowest gearing ratios average 32% gearing

10 S-Reits with lowest gearing ratios A key metric for Reits is the gearing ratio, also known as aggregated leverage, which is a metric closely...

Singapore Exchange Ltd (SGX)

REIT Watch – Hospitality S-REITs’ DPU rebound 32% in 2022

Of the 30 S-REITs which have declared full year 2022 distributions, median change in distribution per unit (DPU) increased marginally by 0.2 per...

Singapore Exchange Ltd (SGX)

REIT Watch – Retail S-REITs’ metrics surpass pre-Covid; poised to benefit from tourism boost

Retail S-REITs’ metrics surpass pre-Covid; poised to benefit from tourism boost The Singapore Tourism Board expects the nation to receive up to 14...

Singapore Exchange Ltd (SGX)

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