Latest news with #Reits
Business Times
4 days ago
- Business
- Business Times
Navigating Asean's markets in H2: A balanced approach for a mixed outlook
GOING into the second half of the year, we see the market landscape of Asean presenting a mixed bag of opportunities and challenges. While monetary easing and clarity on US trade policies promise a brighter outlook for equities, lingering uncertainties may still affect earnings. With the probability of a US and global economic recession hovering at an elevated 40 per cent, challenges remain for economies from the Association of Southeast Asian Nations (Asean). The market's focus has been on reciprocal tariffs, but the game changer for Asean may be the outcome for exemptions on semiconductors, pharmaceuticals, and certain commodities – whether they will be sustained. For countries like Malaysia and Singapore, where 60 per cent of exports enjoy tariff exemptions, the ongoing investigations under Section 232 of the Trade Expansion Act of 1962 will also play a crucial role in raising the baseline for tariffs for the region. Monetary policy: a beacon of hope Rate cuts are expected to provide relief to sectors such as real estate and consumer staples, enhancing liquidity and spurring investment. For instance, Singapore's strategic S$NEER slope reductions have already lowered borrowing costs, benefiting real estate investment trusts (Reits) and potentially boosting local equity fund subscriptions. The Philippines, too, is poised for multiple rate cuts, with expectations of two more 25 basis point reductions. This move could lead to equity re-rating and bolster growth in consumer credit and real estate sectors. Trade policy clarity: a catalyst for confidence Clarity in trade policy could further bolster market performance. The recent US-Vietnam deal, which significantly reduced tariffs on domestically produced goods to 20 per cent, offers a blueprint for other Asean nations. This two-tier tariff system, with higher tariffs on transshipment goods and lower country-level tariffs, provides a clearer framework for trade negotiations. Such clarity could boost investor confidence and attract positive foreign direct investment flows into the region. A NEWSLETTER FOR YOU Friday, 8.30 am Asean Business Business insights centering on South-east Asia's fast-growing economies. Sign Up Sign Up Indonesia and the Philippines had also agreed on a similar tariffs rate (19 per cent) with the US. Anticipation of similar deals for Thailand and Malaysia could further enhance investor confidence. Vietnam's stock market, for instance, has already rallied by over 9 per cent month-to-date. With strong government fiscal support and the potential reclassification of Vietnam to Emerging Market status on the FTSE in September, we have recently upgraded the country's market allocation from neutral to overweight. We expect this upgrade to attract more than US$500 million in inflows and spur positive sentiment in the stock market. Sectoral opportunities amid uncertainties In this evolving landscape, industrial real estate, ports, logistics companies, and tech producers emerge as sectors to watch. Vietnam's emphasis on science and technology development, coupled with infrastructure projects, positions its industrial and construction sectors for sustained growth. In the Philippines, the property market is poised for recovery, driven by attractive mortgage rates and infrastructure improvements. Reduced unsold inventory and lower vacancy rates in key CBD offices could also potentially drive positive rental reversion in 2026. In Singapore, sharp interest-rate cuts, high dividend yields and the Equity Market Development Programme make Reits and small to mid-cap stocks attractive. Navigating the challenges However, the path is not without hurdles. Persistent US inflation poses a downside risk for equities in the region. Rising terminal policy rate expectations, higher term premia and poor supply demand dynamics could lead to a substantial increase in US 10-year yields, prompting a reassessment of discounted cash flows and cross-asset volatility. This risk is particularly acute for manufacturing and export-oriented economies within Asean, which are highly exposed to global demand fluctuations. Geopolitical tensions continue to cast a pall over markets, with rising protectionism and trade wars disrupting economic stability and investor confidence. The ongoing scrutiny of transshipment practices and sectoral exemptions, such as those for semiconductors and pharmaceuticals, adds layers of complexity to trade negotiations and economic forecasts. With 'Liberation Day' tariffs set to take effect on Aug 1 for Asean countries that received Trump's letters, uncertainty looms large. Even if agreements are reached, effective tariffs are likely to settle higher than the current 10 per cent holding rate, with additional sectoral tariffs posing another downside risk. A balanced approach to growth In conclusion, while Asean grapples with global recession risks and geopolitical uncertainties, opportunities for growth remain through strategic monetary easing and trade policy advancements. Investors should adopt a balanced approach to risk management and investment strategy, focusing on high-quality, defensive assets with greater domestic exposure. The writer is head of Asia & co-head of global emerging markets equity strategy at JPMorgan
Business Times
5 days ago
- Business
- Business Times
Reits, institutional investors and funds in ‘buy mode' as debt costs ease
[SINGAPORE] Real estate investment trusts (Reits), investors and funds have turned 'more acquisitive' in Singapore this year, even as geopolitical and macroeconomic uncertainties persist. Speaking on Thursday (Jul 24) at the annual property market seminar organised by the Real Estate Developers' Association of Singapore (Redas), CBRE deputy managing director of Singapore advisory and capital markets head Michael Tay noted an overall improvement in buying sentiment across the real estate investment market as interest rates eased. In the year to date, short-term interest rates in Singapore have fallen by 110 basis points, with the 10-year average now standing at 1.3 per cent. At a separate panel discussion during the Redas event, Taimur Baig, DBS chief economist, said: 'Singapore is going through a golden era in terms of capital flows. It is an overwhelming amount of portfolio and foreign direct investment that's coming to Singapore right now.' With almost a trillion dollars of foreign current deposit sitting in Singapore, Baig said: 'All that inflow, all the liquidity, materialised into collapsing the domestic interest rate.' Given the more accretive environment, Tay noted that 'investors are starting to see and feel that it is time to put money back into the Singapore market'. A NEWSLETTER FOR YOU Tuesday, 12 pm Property Insights Get an exclusive analysis of real estate and property news in Singapore and beyond. Sign Up Sign Up Investors are also drawn to the Republic for its safe-haven status and steady yields, even though the market has seen limited repricing, unlike that of South Korea, China and Australia, said Tay. 'Despite tighter yields, Singapore has become a key component for most (institutional investors') portfolios as they balance risks across the portfolio.' Among Asia-Pacific investment markets, Singapore had the third-highest year-on-year growth in H1 2025, behind Japan and South Korea, said Tay. Investment activity in the city-state is up 7 per cent year on year, with private volumes up 20 per cent on the year. Notable deals include Fraser Centrepoint Trust's purchase of the rest of Northpoint City for around S$1.1 billion in March; IOI Properties' acquisition of a 50.1 per cent stake in the mixed-use project South Beach for S$834.2 million in June; and Mapletree Industrial Trust's divestment of three industrial assets for S$535.3 million to Brookfield Asset Management. In April, Bain Capital also acquired Blackstone's Singapore worker dormitory firm Avery Lodge for S$750 million. CBRE's Investors Intentions Survey in January found Reits, institutional investors and funds signalling more acquisitions in 2025. Net buying intentions from Reits measured at 22 per cent, up from minus 13 per cent in the prior year. That of institutional investors rose from 4 to 12 per cent, and property funds from minus 4 per cent to 10 per cent. Meanwhile, private investors were expected to divest more real estate assets, capitalising on improving market sentiment after acquiring them during a period of price dislocation. Developers were expected to be 'net neutral investors' in the year, with higher construction and labour costs weighing on development decisions, said the report. The industrial and office sectors were top preferred asset classes, with interest in office assets expected to pick up marginally this year due to stabilising or improving leasing activity in some markets. The living sector too, received strong interest with a few notable deals closing in the half year. BlackRock and Malaysia's YTL Corp acquired Citadines Raffles Place for S$280 million in May, and a BlackRock-led consortium bought Momentus Serviced Residences Novena for just over S$100 million in the same month. Earlier in February, an Indonesian tycoon acquired Oakwood Studios Singapore, a freehold serviced apartment block on Mount Elizabeth, for S$152.8 million. In alternative assets, investors are most keen on data centres, with interest also running high in student housing, CBRE's survey found. Despite the upswing in activity, Tay warned of growing concerns over trade wars and a potential recession in the next six months. In Singapore, investors are also worried that interest rate cuts may come slower than expected, he said. Nonetheless, Tay noted strong fundamentals in Singapore as the benchmark stock market index hit record highs. 'In most cycles, the performance of the equities market is a prelude to confidence and buying interest,' he explained. 'There is normally a price gap of anything from six to 12 months, so we feel positively that with the confidence in the equities market… and (what we see) coming through in the first half of this year, stronger interest will come back into Singapore's real estate market across asset classes.'
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Business Standard
18-07-2025
- Business
- Business Standard
Sebi plans revamp of MF categorisation norms to curb scheme overlap
The Securities and Exchange Board of India (Sebi) has proposed a comprehensive overhaul of rules guiding how the ₹75-trillion mutual fund (MF) industry designs its offerings. The redesign -- the first since the introduction of categorisation norms in 2017 -- aims to curb the mushrooming of near-identical schemes, while giving fund houses room to innovate. In a consultation paper released Friday, Sebi proposed allowing fund houses to launch retirement fund-of-funds (FoFs) with a target maturity strategy, enabling them to attract long-term, pension fund-like money. Fund houses managing schemes exceeding ₹50,000 crore in assets will also be allowed to launch additional schemes in the same category, to address liquidity challenges, particularly in the smallcap and midcap segments. To boost diversification, Sebi plans to permit equity-oriented schemes to invest in gold and silver, expanding beyond their current scope of equity, debt, real estate investment trusts (Reits), and infrastructure investment trust (Invits). The move aims to provide better downside protection during periods of high equity valuations, according to MF officials. To prevent redundant launches, Sebi has introduced a 50 per cent cap on portfolio overlap between sectoral/thematic equity schemes and other equity schemes, excluding largecap funds. This follows a surge in thematic and sectoral schemes, which grew from 149 to 202 in 2024, with passive schemes also rising over 12 per cent, largely in thematic and factor-based categories. Sebi plans separate regulations to address the proliferation of passive schemes. The regulator has also proposed expanding active equity, hybrid, and debt categories. Fund houses will now be allowed to offer both value and contra schemes (previously limited to one). A new sectoral debt fund category, investing over 80 per cent in debt instruments of a specific sector, was also introduced. In the solution-oriented space, Sebi plans to expand the number of permissible schemes from two to six. The proposed retirement FoF category will invest across equity, hybrid, and debt funds, with a life cycle FoF launch permitted every five years, for a maximum tenure of 30 years.
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Business Standard
06-07-2025
- Business
- Business Standard
18 debt issuances, ₹1 trillion+, the fastest half-year sprint yet
Reits, Invits tapped debt every 10 days in record run Sachin P Mampatta Mumbai Listen to This Article Investment vehicles that manage rental properties and infrastructure assets have been increasing their debt levels. There has been a debt issue roughly every 10 days from either a real estate investment trust (Reit) or an infrastructure investment trust (Invit) in the first half of 2025, according to an analysis of issuer data from Prime Database. The cumulative amount of debt raised in the first six months of 2025 is higher than in any similar period since data became available. Total debt issuance since inception has now crossed ₹1 trillion, reaching ₹1.02 trillion as of June-end. A Reit manages properties such
New Straits Times
03-07-2025
- Business
- New Straits Times
Reits, construction buck Bursa downtrend in first half of 2025
KUALA LUMPUR: Real estate investment trusts (Reits) and the construction sector flew under the radar in the first half of the year, quietly emerging as two of the most resilient performers on Bursa Malaysia. CIMB Securities said both sectors outperformed during the period, amid a volatile landscape where technology, healthcare and finance dominated the headlines. "For the first half of 2025, REITs and the construction sector were the strongest performers," the firm said in its June 2025 monthly wrap note. "The broader FTSE Bursa Malaysia KLCI (FBM KLCI) declined 6.7 per cent over the same period, while technology and healthcare plunged 28.3 per cent and 21.4 per cent, respectively." CIMB Securities noted that construction stocks continued to attract steady support from local institutional investors. In June alone, the sector recorded RM130.8 million in net buying, the second-highest among all sectors after utilities. Reits also attracted balanced interest, with local institutions and foreign investors registering net inflows of RM20 million and RM62.5 million, respectively. Year-to-date, the FBM KLCI remains down 6.7 per cent despite recording a 1.6 per cent month-on-month gain in June, equivalent to a 24-point increase. CIMB Securities said optimism in the market continues to hinge on several unresolved factors. "We expect the market to remain range-bound in the near term owing to concerns over potential earnings risks from the expanded Sales and Service Tax and uncertainty surrounding the United States tariff outcome on July 9," it said. It added the potential removal of subsidies and other fiscal reforms, particularly fuel subsidy rationalisation, may have implications for inflation, consumer spending and overall market direction.
