This week promises excitement as the second-quarter financial results start to pour in. We observe that investors are maintaining positions in Singapore telecommunications, financials, and capital goods, while timing a potential Federal Reserve rate cut to seek entry opportunities in real estate investment trusts (REITs).
Key business updates to watch include OUE REIT (SGX:TS0U), Mapletree Logistics Trust (SGX:M44U), Frasers Centrepoint Trust (SGX: J69U), Suntec REIT (SGX:T82U), Mapletree Industrial Trust (SGX:ME8U), iFAST Corporation Ltd (SGX:AIY), Parkway Life REIT (SGX:C2PU), Keppel DC REIT (SGX: AJBU), and CapitaLand Ascott Trust (SGX:HMN), which we view as likely to be in line with consensus.
Here are some of our 2Q24F results preview:
1. Mapletree Logistics Trust – Dividend per unit (DPU) is likely to be slightly lower quarter-on-quarter (q-o-q) and year-on-year (y-o-y) due to income gaps from asset divestments and higher funding costs, partially offset by positive rental reversions.
2. Frasers Centrepoint Trust – Net property income is likely to be lower y-o-y due to the divestment of Changi City Point, despite maintaining positive rental reversions.
3. Mapletree Industrial Trust – DPU is projected to remain flat q-o-q, buoyed by capital distributions from divestment gains and continued positive rental reversions.
4. Parkway Life REIT – DPU is expected to rise y-o-y, driven by higher contributions from Singapore hospitals and a robust Japanese Yen income hedge, partly offset by higher funding costs.
5. Keppel DC REIT – DPU is expected to fall y-o-y due to the impairment of receivables from its tenant Bluesea in China.
6. CapitaLand Ascott Trust – DPU is projected to decrease y-o-y due to income gaps from the six divested assets and higher interest expenses.
Besides corporate earnings, numbers on the Singapore’s core inflation rate and overall inflation rate for June will be released. Core consumer prices, excluding cars and accommodation, remained at 3.1% in May, consistent with April. Headline inflation increased to 3.1% in May from 2.7% in April. Inflation is expected to be on a downward trajectory over the year but at a slower rate, in line with general global trends in major economies.
The Monetary Authority of Singapore (MAS) is set to release its upcoming monetary policy statement this Friday, which may maintain the appreciating trajectory of the S$NEER policy band to ensure ongoing mitigation of imported inflation and domestic cost pressures, thereby securing medium-term price stability.
The final Urban Redevelopment Authority (URA) property index for Q2 is also expected. Preliminary estimates show a 1.1% q-o-q rise in private home prices, softer than the 1.4% growth in Q1. This is attributed to high mortgage rates, economic uncertainty, and ample new home supply.
The forthcoming preliminary estimates for the Q2 unemployment rate will be closely watched. Singapore’s seasonally adjusted unemployment rate edged up to 2.1% in Q1 from 2% in the previous period. The Ministry of Manpower anticipates a continued low unemployment rate and an improved economic outlook for 2024.
Adding to the economic landscape, Industrial Production for June will also be released. In May 2024, Singapore’s manufacturing production grew 2.9% y-o-y, exceeding market forecasts of a 2% rise.
As the week unfolds, investors will be observing these pivotal data releases and corporate results. The outcomes will offer valuable insights into economic trends and market conditions, helping to navigate investment decisions and anticipate future market movements.
Reference
Singapore Strategy | Positioning for 2QCY24 reporting season
Disclaimer: ProsperUs Manager of Content Hailey Chung doesn’t own shares of any mentioned companies.
