Dear readers, in yesterday’s post “WHY THESE STRAITS TIMES INDEX (STI) STOCKS ARE WINNERS FOR THE WEEK?”, I explained why the five Reits and Trusts in the Straits Times Index family have rallied last week. The five Reits and Trusts belong to the Capitaland and Mapletree family and they are:
Capitaland Ascendas Reit
Capitaland Integrated Commercial Trust
Mapletree Industrial Trust
Mapletree Logistics Trust
Mapletree Pan Asia Commercial Trust
The aforementioned five stocks rallied on 14 Dec 23, just after the US Federal Reserves signalled a pause in the interest rate hike. The move by the Federal Reserves has been interpreted into very possible interest rate cuts for next year. Such an interpretation will make Reits and Trusts attractive again
But before Singapore investors jump into Singapore Reits and Trusts, the following are the gains of share prices for the five stocks as compared to last year for information: most of the Reits and Trusts have already gained substantially.
Mapletree Industrial Trust (11.8%)
Capitaland Ascendas Reit (10.4%)
Mapletree Logistics Trust (6.9%)
Capitaland Integrated Commercial Trust (-)
Mapletree Pan Asia Commercial Trust (-7.3%)
Before investors chase up the theme of Reits and Trusts now, I would caution investors to invest in a certain Reit and Trust only if they have strong compelling reasons to do so and can have a long holding period. Potential interest rate cuts are just one of the factors at play and there are others: like a possible recession next year, which will cause all stocks across the board to go south.