Technical Analysis of FTSE ST REIT Index (FSTAS8670)

FTSE ST Real Estate Investment Trusts (FTSE ST REIT Index) broke out from the 10 years resistance at 875 with significant increase in trading volume. The REIT index is currently retracing from the high 941.77 to  895.14 (-4.95%). Next immediate support zone is between 870 to 875 for a healthy correction.  Previous chart on FTSE ST REIT index can be found in the last post Singapore REIT Fundamental Comparison Table on July 1, 2019.

Based on the current chart pattern and and momentum,  the sentiment is BULLISH and the trend for Singapore REIT direction is still UP. The recent selling can be a healthy correction before the REIT index can move higher.

Fundamental Analysis of 42 Singapore REITs

The following is the compilation of 42 REITs in Singapore with colour coding of the Distribution Yield, Gearing Ratio and Price to NAV Ratio. This gives investors a quick glance of which REITs are attractive enough to have an in-depth analysis. Added 3 new IPO (ARA US Hospitality Trust, Eagle Hospitality Trust and Prime US REIT) in this month table. Do take note that distribution yield for these 3 newly IPO are just a projection based on the IPO prospectus.

• Price/NAV decreases from 1.07 to 1.05 (Singapore Overall REIT sector is over value now).
• Distribution Yield increases from 6.22% to 6.37% (take note that this is lagging number). About 33.3% of Singapore REITs (14 out of 42) have Distribution Yield > 7%.
• Gearing Ratio at 34.7%. 24 out of 42 have Gearing Ratio more than 35%. In general, Singapore REITs sector gearing ratio is healthy. Note: The current limit of gearing ratio for REITs listed in Singapore Stock Exchange is 45% but there is a consultation paper by SGX to review the potential increase to 50-55% limit.
• The most overvalue REIT is Parkway Life (Price/NAV = 1.63), followed by Keppel DC REIT (Price/NAV = 1.58), Ascendas REIT (Price/NAV = 1.50), Mapletree Industrial Trust (Price/NAV = 1.47), Mapletree Logistic Trust (Price/NAV = 1.30), Frasers Logistic & Industrial Trust (Price/NAV = 1.30), CapitaMall Trust (Price/NAV = 1.28) and Mapletree Commercial Trust (Price/NAV = 1.28)
• The most undervalue (base on NAV) is Fortune REIT (Price/NAV = 0.59), followed by OUE Comm REIT (Price/NAV = 0.75) and Far East Hospitality Trust (Price/NAV = 0.75).
• The Highest Distribution Yield (TTM) is Eagle HT (9.0%), followed by SoilBuild BizREIT (8.67%), Sasseur REIT (8.45%), EC World REIT (8.42%), Lippo Mall Indonesia Retail Trust (8.26%),  First REIT (8.11%) ARA HT (8.04%).
• The Highest Gearing Ratio are ESR REIT (39%), Far East HTrust (39.8%) and OUE Comm REIT (39.3%) and SoilBuild BizREIT  (39.4%)
• Top 5 REITs with biggest market capitalisation are Ascendas REIT ($9.56B), CapitaMall Trust ($9.63B), Capitaland Commercial Trust ($7.65B), Mapletree Commercial Trust ($5.88B) and Mapletree Logistic Trust ($5.52B)
• The bottom 3 REITs with smallest market capitalisation are BHG Retail REIT ($350M), Sabana REIT ($474M) and iREIT Global REIT ($499M)

Disclaimer: The above table is best used for “screening and shortlisting only”. It is NOT for investing (Buy / Sell) decision. To learn how to use the table and make investing decision, Sign up next REIT Investing Seminar here to learn how to choose a fundamentally strong REIT for long term investing for passive income generation

• 1 month decreases from 1.88450% to 1.88250%
• 3 month decreases from 2.00192% to 1.99783%
• 6 month decreases from 2.06017% to 2.05792%
• 12 month decreases from 2.18675% to 2.18500%

Based on current probability of Fed Rate Monitor,  the probability of another 25 bps cut in Sept is 80%.

Summary

Fundamentally the whole Singapore REITs is over value now based on simple average on the Price/NAV. The big cap REITs are getting quite expensive and the distribution yield are still not so attractive currently although those REITs are going through minor correction now. Most of the DPU yield for big cap REIT is below 5% now. The yield spread between big cap and small cap REIT remains wide. This indicates value picks only in small and medium cap REITs.

Yield spread (reference to 10 year Singapore government bond of 1.735%) has widened from 4.205% to 4.635%.  DPU yield for a number of small and mid-cap REITs are still very attractive  (>7%) although price has started moving north. The risk premium remains attractive as compared to big cap REITs.

Technically, the REIT index is currently going through correction but still trading in a bullish up trend. This bullish sentiment may continue due to the 3 macro factors (1) low interest rate environment (2) potential relax of gearing ratio to 50-55% limit (3) TINA (There Is No Alternative) for other high yield asset classes. The positive sentiment may entice Singapore REITs to take on more debt to grow the current portfolio.

You can catch me at the coming Invest Fair 2019 as I will be sharing my view on the current Singapore REIT market. You can also catch me in between the break if you want to ask me any questions regarding Financial Planning or Investment. You can check out the registration detail here. Kenny Loh @ InvestFair2019

If you need an independent professional review on your current REIT portfolio and need any recommendation, you may engage me in the REIT portfolio Advisory. REITs Portfolio Advisory.  https://mystocksinvesting.com/course/private-portfolio-review/

Technical Analysis of FTSE ST REIT Index (FSTAS8670)

FTSE ST Real Estate Investment Trusts (FTSE ST REIT Index) broke out from the 10 years resistance at 875 with significant increase in trading volume. The REIT index increased from 858.67 to 916.95 (+6.78%) and  as compared to last post on Singapore REIT Fundamental Comparison Table on June 3, 2019.

The REIT index is entering in an uncharted territory after breaking new high and may head towards to 1000 points based on projection of 161.8% Fibonacci level. Based on the current chart pattern and and momentum,  the sentiment is BULLISH and the trend for Singapore REIT direction is still UP. However, the REIT index may go for a short term pause before moving higher.

Fundamental Analysis of 39 Singapore REITs

The following is the compilation of 39 REITs in Singapore with colour coding of the Distribution Yield, Gearing Ratio and Price to NAV Ratio. This gives investors a quick glance of which REITs are attractive enough to have an in-depth analysis. The 2 new IPO ARA US Hospitality Trust and Eagle Hospitality Trust are not included in this table due to insufficient data points.

• Price/NAV increases from 1.02 to 1.07 (Singapore Overall REIT sector is over value now).
• Distribution Yield decreases from 6.51%  to 6.22% (take note that this is lagging number). About 33.3% of Singapore REITs (13 out of 39) have Distribution Yield > 7%.
• Gearing Ratio remains at 34.9%. 22 out of 39 have Gearing Ratio more than 35%. In general, Singapore REITs sector gearing ratio is healthy. Note: The limit of gearing ratio for REITs listed in Singapore Stock Exchange is 45%.
• The most overvalue REIT is Parkway Life (Price/NAV = 1.64), followed by Ascendas REIT (Price/NAV = 1.52), Keppel DC REIT (Price/NAV = 1.59) and Mapletree Industrial Trust (Price/NAV = 1.48), Mapletree Logistic Trust (Price/NAV = 1.36), Frasers Logistic & Industrial Trust (Price/NAV = 1.33) and CapitaMAll Trust (Price/NAV = 1.31)
• The most undervalue (base on NAV) is Fortune REIT (Price/NAV = 0.65), followed by OUE Comm REIT (Price/NAV = 0.71) and Far East Hospitality Trust (Price/NAV = 0.78).
• The Highest Distribution Yield (TTM) is Sasseur REIT (8.59%) ,  followed by First REIT (8.35%), SoilBuild BizREIT (8.39%),  Cromwell European REIT (8.54%) and Lippo Mall Indonesia Retail Trust (8.04%).
• The Highest Gearing Ratio are ESR REIT (42.0%), Far East HTrust (39.9%) and OUE Comm REIT (39.4%) and SoilBuild BizREIT  (39.3%)
• Top 5 REITs with biggest market capitalisation are Ascendas REIT ($9.7B), CapitaMall Trust ($9.7B), Capitaland Commercial Trust ($8.1B), Mapletree Commercial Trust ($6.0B) and Mapletree Logistic Trust ($5.7B)
• The bottom 3 REITs with smallest market capitalisation are BHG Retail REIT ($354M), Sabana REIT ($484M) and iREIT Global REIT ($485M)

Disclaimer: The above table is best used for “screening and shortlisting only”. It is NOT for investing (Buy / Sell) decision. To learn how to use the table and make investing decision, Sign up next REIT Investing Seminar here to learn how to choose a fundamentally strong REIT for long term investing for passive income generation

• 1 month decreases from 1.88538% to 1.88450%
• 3 month decreases from 2.00338% to 2.00192%
• 6 month decreases from 2.06215% to 2.06017%
• 12 month remains at 2.18675%

Based on current probability of Fed Rate Monitor,  the probability of keeping the interest rate at 2.25-2.50% is 0%! This means US Fed Reserve may cut cut the interest rate of 50 bps to 1.75-2.00% by end of this year!

Summary

Fundamentally the whole Singapore REITs is over value now based on simple average on the Price/NAV. The big cap REITs are getting quite expensive and the distribution yield are not so attractive currently. Most of the DPU yield for big cap REIT is below 5% now. The yield spread between big cap and small cap REIT remains wide. This indicates value picks only in small and medium cap REITs.

Yield spread (reference to 10 year Singapore government bond of 2.015%) has tightened from 4.448% to 4.205%. DPU yield for a number of small and mid-cap REITs are still very attractive  (>8%) at the moment.  Some small and medium size REITs are starting to move up due to attractive risk premium compared to big cap REITs.

Technically, the REIT index is trading in a bullish up trend. This bullish sentiment may probably push the index further up supported by an increasing trading volume caused by the institutional fund inflow into Singapore REITs. In addition, Singapore REITs may take advantage of the low interest rate environment to take on more debt to grow the current portfolio.

If you need an independent professional review on your current REIT portfolio and need any recommendation, you may engage me in the REIT portfolio Advisory. REITs Portfolio Advisory.  https://mystocksinvesting.com/course/private-portfolio-review/

Technical Analysis of FTSE ST REIT Index (FSTAS8670)

FTSE ST Real Estate Investment Trusts (FTSE ST REIT Index) changed from 869.49  to 858.67 (-1.24%) as compared to last post on Singapore REIT Fundamental Comparison Table on May 5, 2019.

The REIT index is currently facing immediate resistance of 875 (the previous high in 2018) and trading within a falling wedge consolidation range between 848 to 870.  Based on the current chart pattern and and momentum,  the sentiment is BULLISH and the trend for Singapore REIT direction is still UP with a pause. All eyes will be focusing on whether the REIT index can break the 2018 high (875) and 2013 high (892) back in May 2013. Another scenario would be a break down of the 848 immediate support and we will see a larger correction of REIT index, heading towards the 200D SMA support of about 820.

Fundamental Analysis of 39 Singapore REITs

The following is the compilation of 39 REITs in Singapore with colour coding of the Distribution Yield, Gearing Ratio and Price to NAV Ratio. This gives investors a quick glance of which REITs are attractive enough to have an in-depth analysis. The 2 new IPO ARA US Hospitality Trust and Eagle Hospitality Trust are not included in this table due to insufficient data points.

• Price/NAV decreases from 1.03 to 1.02 (Singapore Overall REIT sector is slightly over value now).
• Distribution Yield increases from 6.40% to 6.51% (take note that this is lagging number). About 38.5% of Singapore REITs (15 out of 39) have Distribution Yield > 7%.
• Gearing Ratio increases from 34.7% to 34.9%. 22 out of 39 have Gearing Ratio more than 35%. In general, Singapore REITs sector gearing ratio is healthy. Note: The limit of gearing ratio for REITs listed in Singapore Stock Exchange is 45%.
• The most overvalue REIT is Parkway Life (Price/NAV = 1.62), followed by Ascendas REIT (Price/NAV = 1.42), Keppel DC REIT (Price/NAV = 1.49) and Mapletree Industrial Trust (Price/NAV = 1.40).
• The most undervalue (base on NAV) is Fortune REIT (Price/NAV = 0.64), followed by OUE Comm REIT (Price/NAV = 0.68), Lippo Mall Indonesia Retail Trust (Price/NAV = 0.71), Sabana REIT (Price/NAV = 0.75) and Far East Hospitality Trust (Price/NAV = 0.73).
• The Highest Distribution Yield (TTM) is Lippo Mall Indonesia Retail Trust (9.19%), followed by First REIT (8.60%), SoilBuild BizREIT (8.67%),  Sasseur REIT (8.75%)  and Cromwell European REIT (8.20%).
• The Highest Gearing Ratio are ESR REIT (42.0%), Far East HTrust (39.9%) and OUE Comm REIT (39.4%) and SoilBuild BizREIT  (39.3%)
• Top 5 REITs with biggest market capitalisation are Ascendas REIT ($9.0B), CapitaMall Trust ($8.9B), Capitaland Commercial Trust ($7.2B), Mapletree Commercial Trust ($5.5B) and Mapletree Logistic Trust ($5.3B)
• The bottom 3 REITs with smallest market capitalisation are BHG Retail REIT ($359M), Sabana REIT ($442M) and iREIT Global REIT ($473M)

Disclaimer: The above table is best used for “screening and shortlisting only”. It is NOT for investing (Buy / Sell) decision. To learn how to use the table and make investing decision, Sign up next REIT Investing Seminar here to learn how to choose a fundamentally strong REIT for long term investing for passive income generation

• 1 month increases from 1.82283% to 1.88538%
• 3 month increases from 1.94507% to 2.00338%
• 6 month increases from 2.00014% to 2.06215%
• 12 month increases from 2.12550% to 2.18675%

Based on current probability of Fed Rate Monitor, the US Fed Reserve reduce the interest rate by 50bps to  2.00% in 2019. Probability of keeping the interest rate at 2.25-2.50% is only 3.2%! This means US Fed Reserve will cut the interest rate by end of this year! This is a big change from last month.

Summary

Fundamentally the whole Singapore REITs is slightly over value now. The big cap REITs are getting expensive and the distribution yield are not so attractive currently. Most of the DPU yield for big cap REIT is below 5% now. The yield spread between big cap and small cap REIT remains wide. This indicates value picks only in small and medium cap REITs.  For reference, 10-years risk free yield rate for latest Singapore Saving Bonds is 2.16%.

Yield spread (reference to 10 year Singapore government bond of 2.062%) has widened from 4.15% to 4.448%. DPU yield for a number of small and mid-cap REITs are still very attractive  (>8%) at the moment.  It is expected the next move would be on small and medium size REITs due to higher risk premium compared to big cap REITs.

Technically, the REIT index is still trading in a bullish territory and have been very defensive compared to STI. With the potential rate cut in 2019, don’t be surprise REIT index to break the resistance (875 and 892) to move higher.

If you need an independent professional review on your current REIT portfolio and need any recommendation, you may engage me in the REIT portfolio Advisory. REITs Portfolio Advisory.  https://mystocksinvesting.com/course/private-portfolio-review/