Singapore Stock Exchange[SGX]- SINGAPORE real estate investment trusts (S-Reits) saw drawdowns on
Monday on elevated volumes, while yields on Singapore's 10-year
government bonds climbed 10 basis points to 2.4 per cent, a new high
since October 2014, putting pressure on bond prices here.
CMC Markets analyst Nicholas Teo said this in a note on Tuesday
morning. He added this came on the back of last Friday's positive US
jobs report, which led the yield on 10-year US Treasuries to surge to
their highest level this year, past the 2.2 per cent yield.
This was likely because the market now expects the Federal Reserve's
interest-rate hike to come sooner rather than later, he said.
Interest-rate increases are seen as a negative for yield instruments
such as Reits.
"In turn, this has laid renewed pressure on Singapore Reits, a proxy
yield play in the local market. Suntec Reit, CapitaMall Trust, Mapletree
Commercial Trust and Fortune Reit, all saw drawdowns of between 1.4 per
cent to 3.35 per cent in trading yesterday (on Monday)," he said.
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