Latest news with #Singdollar
Yahoo
2 days ago
- Business
- Yahoo
High-yielding bonds in EM may beat peers as treasuries decline
Debt from India, Indonesia, Brazil and South Africa has outperformed EM peers since April 2, when US President Donald Trump shocked global markets with his tariffs. Riskier emerging-market bonds may continue to beat their lower-yielding peers as the dollar's slide softens a rise in Treasury yields, protecting investor returns, according to analysis by Bloomberg. Debt from India, Indonesia, Brazil and South Africa has outperformed EM peers since April 2, when US President Donald Trump shocked global markets with his tariffs. The dollar rose in the four previous instances since 2021 when 10-year emerging-market bonds reacted to a rise in US benchmark yields. This time, however, the dollar has fallen, allowing currency returns to compensate for the duration spillover impact from higher US yields. 'Spillovers from rising US back-end rates to EM rates might be lower this time around' due to the effect of the weakening greenback, Goldman Sachs Group Inc. strategists including Kamakshya Trivedi and Danny Suwanapruti wrote in a recent note. Higher-yielding EM bonds will tend to benefit more from this environment, they added. Dollar-funded investments into yielder EM bonds tend to be unhedged due to the high cost of implementing protection relative to their lower-yielding peers, and see larger FX gains when the dollar falls. The ratio of yield moves this quarter versus the historical average for India was minus 0.88, versus Indonesia, Brazil and South Africa at -0.57, -0.55 and -0.50 respectively. This means that India's yields in the most recent scenario have declined the most relative to its historical mean. Peers which offer lower yields, such as the Czech Republic and South Korea, tend to be more affected by the surge in US yields due to the tighter spreads. 'EM local markets have been a beneficiary of the weaker US dollar this year,' said Anders Faergemann, head of global sovereigns and economics at PineBridge Investments. 'A continuation of that trend would help to cushion local bond performance.' Start End Indonesia India Malaysia Thailand S. Korea S. Africa Poland Czech Mexico Brazil Chile Aug-3-2021 May-6-2022 0.65 0.91 1.34 1.66 1.54 1.15 5.13 2.89 2.16 3.13 0.77 Aug-1-2022 Oct-4-2022 0.09 0.09 0.54 0.55 0.79 0.23 1.45 1.01 1.10 (1.08) 0.92 July-19-2023 Oct-19-2023 0.64 0.34 0.30 0.78 0.77 0.87 0.48 0.67 1.24 1.21 1.14 Sept-16-2024 Jan-6-2025 0.41 0.00 0.07 (0.23) (0.11) 0.15 0.67 0.46 1.04 2.40 0.35 April-2-2025 May-21-2025 (0.25) (0.30) (0.18) (0.07) (0.02) (0.30) (0.19) 0.03 0.27 (0.78) (0.05) Ratio (0.57) (0.88) (0.32) (0.10) (0.03) (0.50) (0.10) 0.02 (0.20) (0.55) (0.07) See Also: Click here to stay updated with the Latest Business & Investment News in Singapore Alphabet leads US high-grade issuance rush DBS remains overweight US amid 'complex' and 'nuanced' landscape Constructive Asiadollar and Singdollar credit markets in 2024 Read more stories about where the money flows, and analysis of the biggest market stories from Singapore and around the World Get in-depth insights from our expert contributors, and dive into financial and economic trends Follow the market issue situation with our daily updates Or want more Lifestyle and Passion stories? Click here
Straits Times
3 days ago
- Business
- Straits Times
Singapore dollar strength a boon for holidaymakers and students in the US
The impact of a stronger Singdollar against the US dollar has been mixed for businesses and their customers. PHOTO: LIANHE ZAOBAO Singapore dollar strength a boon for holidaymakers and students in the US SINGAPORE – The strength of the Singapore dollar against the greenback is providing significant financial relief to parents whose children are studying in the US and holidaymakers headed there during the June school holidays. The Singdollar has strengthened 6 per cent to 7 per cent against a weakening US dollar in 2025 – the strongest year-to-date performance in the last 20 years. It has been trading recently largely below 1.3 to one US dollar – as low as around 1.28. It reached a 10-year high against the US dollar in 2024 when it hit 1.28. This means that every Singdollar sent to cover tuition, accommodation and living expenses now buys more US dollars than before. 'This reduction in costs can alleviate some of the financial burden, allowing parents to allocate resources towards other aspects of their children's education or travel within the US,' said Mr Christopher Wong, foreign exchange (FX) strategist at OCBC Bank. A Singaporean parent paying a US$30,000 annual tuition fee would have needed $40,500 at the start of 2024 when the exchange rate was closer to 1.35 Singdollars to one US dollar. With the exchange rate at 1.28, the same tuition now costs around $38,400 – a saving of $2,100. The weakening of the US dollar against the Singdollar has also been a boon for Singaporean holidaymakers who will find their travel budgets stretching further in the US. Accommodations, dining and entertainment options can potentially be less expensive, provided that US merchants do not raise prices, Mr Wong said. One avid Singaporean traveller said he is even considering luxury safaris and tours to exotic places like Antarctica – where prices are often quoted in US dollars – as they have become more affordable. A Singaporean homemaker who buys her arts and crafts supplies from the United States is happy as she now coughs up less for her hobby. Beyond families enjoying reduced education costs and greater purchasing power overseas, the effect of a firmer Singdollar is also felt elsewhere – by importers and exporters to inbound visitors. A Filipino tourist who recently visited Singapore to attend American pop star Lady Gaga's concert said it was an expensive holiday for him. Since the start of 2025, the Philippine peso has lost some ground against the Singdollar. He had to exchange about 43.13 pesos for one Singdollar. This compares with January 2024, when he needed 41.95 pesos to get one Singdollar. The stronger local currency against the US dollar has been mixed in its impact on businesses and their customers. Typically, it should benefit companies with big expenses in US dollars. These include airlines, which spend about 30 per cent of their expenses on US dollar-traded jet fuel. However, in the case of Singapore Airlines, its hedging policies would result in a negative $1.6 million impact on its pre-tax profit for every 1 per cent strengthening of the Singapore dollar against the US currency, according to its fiscal year 2024 annual report. Meanwhile, the chief executive officer of a Singapore-based building materials company said it has benefited him as he imports raw materials in US dollars. However, some of his Asean customers are feeling the pain as he sells his products in the Singdollar. 'Export-oriented businesses in Singapore may face challenges as the US dollar weakens against the Singdollar. A stronger Singdollar can make Singaporean exports more expensive for foreign buyers, potentially reducing demand for our goods in international markets,' OCBC's Mr Wong said. Underpinning the Singdollar is its appeal as a safe haven, especially in an uncertain environment as a result of the US' tariff wars; Singapore's solid fundamentals; and a softer US dollar trend as investors shy away from US assets. Ms Jen-Ai Chua, equity research analyst at Julius Baer, has a three-month forecast of 1.32 Singdollar to one US dollar. 'While the USD/SGD currency pair is largely influenced by broader US dollar movements, recent FX policy easing by the Monetary Authority of Singapore (MAS) and potential further easing ahead could weigh on the Singdollar in the coming months,' she said. Mr Sim Moh Siong, FX strategist at the Bank of Singapore (BOS), sees the Singdollar trading around 1.26 to one US dollar from now to June 2026. He said it is unclear whether the MAS will continue loosening its monetary policy when it next meets in July, or hold it off until the October meeting. Greater clarity is needed, notably on how much of Singapore's so-far resilient growth is a result of front-loading by businesses racing to beat US President Donald Trump's new tariffs. Front-loading – which temporarily lifts exports – artificially boosts growth, especially in the electronics sector, and growth could slow in the second half of the year, Mr Sim said. The central bank had eased its policy stance in its January meeting – the first time since 2020. It again eased its monetary policy in April. As for the US dollar, headwinds persist, the BOS FX strategist said, pointing to the outlook for the US economy as the most immediate one. 'Tariff uncertainty is still lingering in the background. The average effective tariff rate that the US has imposed is still higher than at the start of the year. We are talking about 18 per cent relative to 2 per cent to 3 per cent. That's a very large tax hike for the US consumers,' Mr Sim said. Other concerns include the US public debt and fiscal health. Mr Trump's sweeping tax Bill would add US$3 trillion to US$5 trillion to the country's debt, according to some estimates. There are also concerns over the independence of the US Federal Reserve once its chairman Jerome Powell retires in May 2026 , Mr Sim said. 'The world trusts the US dollar because it trusts the Federal Reserve in keeping inflation low and stable around 2 per cent. If this independence is compromised, then there is a risk of high inflation and that might erode trust in the US dollar,' he said. Despite the foreign exchange risks, the US dollar remains a popular choice for parking funds – whether for overseas investments, salary crediting, savings or transactions. Some banks also offer higher fixed deposit rates for the greenback than Singdollar deposits. For example, DBS Bank is offering 4.06 per cent per annum interest based on a two-month deposit of below US$10,000. Customers get 4.16 per cent for a placement above US$100,000 based on a two-month tenor. OCBC Premier Banking has a promotional rate for US dollar time deposits, where customers get 4.2 per cent per annum for a three-month tenor on a minimum sum of US$50,000. UOB has seen an 80 per cent increase in US dollar fixed deposits for April, compared with the monthly average from January to March , said Ms Jacquelyn Tan, head of group personal financial services at UOB. The bank also saw an increase of 42 per cent in conversion volume from Singdollar to US dollar in April when compared with the monthly average from January to March , she said. UOB is offering 3.76 per cent per annum for US dollar deposits of less than US$50,000 with a two-month tenor. Join ST's WhatsApp Channel and get the latest news and must-reads.
Business Times
18-05-2025
- Business
- Business Times
Healthcare S-Reits see encouraging institutional interest so far this year
HEALTHCARE S-Reits have been the top-performing Reit sub-sector this year, offering an average total return of 6.2 per cent against a 1.1 per cent decline in the iEdge S-Reit Index. The sub-sector also outperformed other Reit sub-sectors over the one-year and three-year periods, clocking average returns of 16.8 and 6.2 per cent, respectively. The two healthcare S-Reits listed in Singapore have reported net institutional inflows amounting to S$17.6 million in the year to date. In contrast, the S-Reit sector as a whole suffered net institutional outflows totalling S$527 million over the same period. Here is a look at the two healthcare S-Reits' business updates for the first quarter of 2025. ParkwayLife Reit ParkwayLife Reit (PLife Reit) is one of the largest listed healthcare Reits in Asia. Its portfolio value stands at about S$2.46 billion, made up of healthcare properties across Singapore, Japan and France. In the first quarter of 2025, PLife Reit posted increases in both gross revenue and net property income (NPI). Gross revenue rose by 7.3 per cent year on year to S$39 million in Q1 2025; NPI went up 7.5 per cent over the same period, to S$36.8 million. The strong performance was driven by contributions from a nursing home acquired in Japan last August, and 11 other homes acquired in France in December 2024. The gains were, however, partially offset by the depreciation of the Japanese yen. Step-up lease agreements in Singapore properties also contributed to the higher distributable income in Q1 2025. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up The Reit's distributable income was S$25 million, up 9.1 per cent year on year. Distribution per unit (DPU) for the period is 1.3 per cent higher at S$0.0384 for the period, and will be distributed in H1 2025. As part of its portfolio optimisation strategy, the Reit also announced that it was divesting its Malaysia portfolio, which accounts for 0.2 per cent of its gross revenue, at S$6.09 million. With this move, the Reit marks its exit from the country. CGSI Research's Lock Mun Yee notes that PLife Reit's income profile is underpinned by a robust rental structure, with built-in rent escalation features and its Singapore portfolio contributing to 65.2 and 66.2 per cent of its total Q1 2025 revenue and NPI, respectively. She also highlights that the Reit has a strong balance sheet, with a gearing ratio of 36.1 per cent, and that 90 per cent of its interest-rate exposure is hedged into fixed rates. Bloomberg pegs PLife Reit's 12-month consensus estimated target price at S$4.70. First Reit For the first quarter of 2025 period, First Reit posted a 2.8 per cent year-on-year decline in both rental and other income, and net property and other income to S$25.4 million and S$24.6 million, respectively. The decline was attributed to the depreciation of the Japanese yen and Indonesian rupiah against the Singdollar. As a result, distributable amount declined by 2.2 per cent year on year, and DPU dipped to S$0.0058 for the period. In local currency terms, Q1 2025 rental and other income for the Reit's Indonesia portfolio rose by 5.5 per cent year on year, while that of Japan remained unchanged. As at Mar 31, 2025, First Reit's gearing rose slightly to 40.7 per cent, and has 56.7 per cent of the debt portfolio either on fixed rates or hedged. Lower interest rates led to a drop in cost of debt from 5 per cent in Q1 2024 to 4.7 per cent in Q1 2025, and the Reit has no refinancing requirements until May 2026. Turning to its strategic review, First Reit says a marketing agent has been appointed to run a competitive and robust price-discovery process which entailed reaching out to more than 60 parties to solicit interest for the Indonesia portfolio. First Reit has also approached multiple parties to explore options relating to the business as part of assessing opportunities. Phillip Securities Research's Darren Chan notes that First Reit is trading at an attractive FY 2025e DPU yield of 9.2 per cent, and that organic growth will come from more Indonesian hospitals achieving performance-based rent. Bloomberg says First Reit has a 12-month consensus estimated target price of S$0.30. The writer is a research analyst at SGX. For more research and information on Singapore's Reit sector, visit for the S-Reits & Property Trusts Chartbook.
Business Times
18-05-2025
- Business
- Business Times
Healthcare S-Reits outperforming broader S-Reit market and sub-segments so far this year
HEALTHCARE S-Reits have been the top-performing Reit sub-sector this year, offering an average total return of 6.2 per cent against a 1.1 per cent decline in the iEdge S-Reit Index. The sub-sector also outperformed other Reit sub-sectors over the one-year and three-year periods, clocking average returns of 16.8 and 6.2 per cent, respectively. The two healthcare S-Reits listed in Singapore have reported net institutional inflows amounting to S$17.6 million in the year to date. In contrast, the S-Reit sector as a whole suffered net institutional outflows totalling S$527 million over the same period. Here is a look at the two healthcare S-Reits' business updates for the first quarter of 2025. ParkwayLife Reit ParkwayLife Reit (PLife Reit) is one of the largest listed healthcare Reits in Asia. Its portfolio value stands at about S$2.46 billion, made up of healthcare properties across Singapore, Japan and France. In the first quarter of 2025, PLife Reit posted increases in both gross revenue and net property income (NPI). Gross revenue rose by 7.3 per cent year on year to S$39 million in Q1 2025; NPI went up 7.5 per cent over the same period, to S$36.8 million. The strong performance was driven by contributions from a nursing home acquired in Japan last August, and 11 other homes acquired in France in December 2024. The gains were, however, partially offset by the depreciation of the Japanese yen. Step-up lease agreements in Singapore properties also contributed to the higher distributable income in Q1 2025. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up The Reit's distributable income was S$25 million, up 9.1 per cent year on year. Distribution per unit (DPU) for the period is 1.3 per cent higher at S$0.0384 for the period, and will be distributed in H1 2025. As part of its portfolio optimisation strategy, the Reit also announced that it was divesting its Malaysia portfolio, which accounts for 0.2 per cent of its gross revenue, at S$6.09 million. With this move, the Reit marks its exit from the country. CGSI Research's Lock Mun Yee notes that PLife Reit's income profile is underpinned by a robust rental structure, with built-in rent escalation features and its Singapore portfolio contributing to 65.2 and 66.2 per cent of its total Q1 2025 revenue and NPI, respectively. She also highlights that the Reit has a strong balance sheet, with a gearing ratio of 36.1 per cent, and that 90 per cent of its interest-rate exposure is hedged into fixed rates. Bloomberg pegs PLife Reit's 12-month consensus estimated target price at S$4.70. First Reit For the first quarter of 2025 period, First Reit posted a 2.8 per cent year-on-year decline in both rental and other income, and net property and other income to S$25.4 million and S$24.6 million, respectively. The decline was attributed to the depreciation of the Japanese yen and Indonesian rupiah against the Singdollar. As a result, distributable amount declined by 2.2 per cent year on year, and DPU dipped to S$0.0058 for the period. In local currency terms, Q1 2025 rental and other income for the Reit's Indonesia portfolio rose by 5.5 per cent year on year, while that of Japan remained unchanged. As at Mar 31, 2025, First Reit's gearing rose slightly to 40.7 per cent, and has 56.7 per cent of the debt portfolio either on fixed rates or hedged. Lower interest rates led to a drop in cost of debt from 5 per cent in Q1 2024 to 4.7 per cent in Q1 2025, and the Reit has no refinancing requirements until May 2026. Turning to its strategic review, First Reit says a marketing agent has been appointed to run a competitive and robust price-discovery process which entailed reaching out to more than 60 parties to solicit interest for the Indonesia portfolio. First Reit has also approached multiple parties to explore options relating to the business as part of assessing opportunities. Phillip Securities Research's Darren Chan notes that First Reit is trading at an attractive FY 2025e DPU yield of 9.2 per cent, and that organic growth will come from more Indonesian hospitals achieving performance-based rent. Bloomberg says First Reit has a 12-month consensus estimated target price of S$0.30. The writer is a research analyst at SGX. For more research and information on Singapore's Reit sector, visit for the S-Reits & Property Trusts Chartbook.
Business Times
13-05-2025
- Business
- Business Times
Greenback's relief rally from US-China tariff truce is but a brief blip: analysts
[SINGAPORE] Traders rewarded the US dollar with gains against major Asian currencies after trade tensions between Beijing and Washington thawed – but the greenback could soon be singing the blues again as analysts expect the relief rally to be short-lived. The US dollar index – which measures the greenback's value against a basket of six major currencies: the euro, yen, pound, Canadian dollar, krona, and franc – jumped more than 1 per cent across Monday (May 12) afternoon before stabilising at around 101.6 as at early evening on Tuesday. The US shaved its earlier tariff of 145 per cent on Chinese goods to 30 per cent on Monday after a temporary deal for 90 days was brokered during weekend trade talks in Geneva. Further negotiations are expected to follow. The larger-than-expected tariff cuts reignited risk-on sentiment across global markets, which reacted swiftly and with much relief. US stocks and treasury yields climbed, and the greenback and renminbi strengthened; meanwhile, investors scaled back their long positions in safe-haven proxies, such as the yen and gold, as they rotated into risk assets. The world's reserve currency reaped returns against its South-east Asian peers, tracking gains on the baht, ringgit, rupiah, Singdollar and Philippine peso. 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 The renminbi was among few currencies that rose against the greenback, charting roughly a 0.8 per cent gain before stabilising to about 7.2 yuan per US dollar as at early evening on Tuesday. Against the backdrop of weakening US dollar dominance, China's renminbi is shaping up to be a barometer for the region's currency swings. Noting that 'the really fascinating market moves came in the FX markets', MUFG Bank's senior currency analyst Michael Wan pointed out in a Tuesday report that these currency flows are not historically what one would expect in a risk-on environment. When investors are more optimistic with a stronger appetite for risk, they would typically shift from safer assets to higher-yielding and riskier ones – which is a disconnect from prevailing market conditions. Wan explained that these currency moves are, to an extent, a short-term reversal of earlier US dollar weakness following Apr 2's announcement of reciprocal tariffs on what Trump has termed 'Liberation Day'. The disparity can also be attributed to partial retracing of earlier outperformance in the euro and yen, as well as previous underperformance in the renminbi. Meanwhile, USD/Asia currency pairs were impacted by their beta, or sensitivity, to the stronger dollar. Fragile rally Foreign exchange (FX) pundits across the board caution that the current bout of strength is built on shaky ground. Maybank analysts said in a Tuesday report that the further unwinding of short-US-dollar positions they observed from the tariff truce 'is probably close to an end'. DBS senior foreign exchange strategist Philip Wee cautioned in a Tuesday report against confusing the trade relief with a catalyst for the US dollar's comeback. 'Trump's policies have been marked by unpredictability and volatility, wielding tariffs to get concessions and pursuing significant tax cuts and industrial subsidies without a meaningful fiscal offset,' he said. He also highlighted US treasury secretary Scott Bessent's warning that his department could exhaust its borrowing capacity as early as in August. MUFG Bank's Wan echoed his sentiments. The way he sees it, the million-dollar question on what will happen to Asian currencies against the dollar moving forward depends not just on trade deals, but also on three driving factors. They are: continued questions over US exceptionalism; capital inflows into American equities that buoy the US dollar and hence its strength against Asian currencies; or the net impact of tariffs on global and regional Asia growth. 'While our eyes are all transfixed on the US-China trade deal at the moment, we should also not forget the upcoming US tax bill, which is in discussion now and might shift the market's focus onto US fiscal sustainability, hence also impacting US dollar/Asia more broadly,' Wan cautioned. Investors will also be closely watching the slew of US data releases to come this week – though HSBC analysts are not as concerned. US consumer prices for April are due to come in on Tuesday; retail sales, producer prices and industrial production figures will be released on Thursday; housing starts for April, and building permit numbers will be announced Friday. 'Even if some of the hard data surprises negatively in the coming weeks, markets may well shrug that off as being driven by the 'pre-China-tariff' world and, thus, no longer relevant,' said the house's strategists in a Monday report. 'Continued resilience in the hard data or even upside surprises on the other hand would likely be taken as a positive – a classic win-win situation,' they added.
