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Broker's take: DBS recommends accumulating S-Reits following sell-off
DBS Group Research said in a report on Wednesday it recommends accumulating certain Singapore real estate investment trusts (S-Reits) following over-selling of the sector by investors.
"The mix of fund redemptions and unwinding of leveraged positions have resulted in the indiscriminate selling of Singapore real estate investment trusts (S-Reits)," said DBS.
The research team singled out CapitaLand Mall Trust, Frasers Centrepoint Trust, Suntec Reit, Keppel Reit, Lendlease Global Reit, Mapletree Industrial Trust and Ascendas Reit for their quality assets and attractive value relative to growth.
These Reits were all trading in the green as at 11.25am on Wednesday.
Once the dust settles on the Covid-19 outbreak, DBS believes investors will refocus back on attractive yield spreads of more than 5 per cent and lower for longer 10-year bond rates that will lend support to higher share prices in the medium term.
It added that the indexation potential for some S-Reits by the second half of 2020 may lead to a rebound in prices.
The DBS report echoes Maybank Kim Eng's positive outlook on S-Reits.