Reits notch healthy gains even as STI falls 0.1% amid regional decline

LOCAL real estate investment trusts (Reits) booked healthy gains on Tuesday (Mar 14) despite overall weakness in markets across the Asia-Pacific region.

The benchmark Straits Times Index (STI) fell 0.1 per cent or 2.62 points to close at 3,129.75, even though half the constituents ended the day higher.

Six of the top seven gainers on the STI were Reits, including Mapletree Logistics Trust, Keppel DC Reit and Mapletree PanAsia Commercial Trust, which rose 3.8 per cent, 3.6 per cent and 3.1 per cent respectively.

The gains in the sector came amid more dovish expectations for rate hikes in the US, as concerns over the contagion risk from banking collapses remain.

“We’ve seen a dramatic repricing of interest-rate expectations, to the extent that markets now price peak rates to be here or near, and rate cuts this year to be highly likely,” said Craig Erlam, senior market analyst at Oanda.

However, he added that he was not fully convinced by the current sentiment.

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“Barring much greater fallout in the financial system, I struggle to see expectations remaining so dovish,” he said, noting that US inflation data later on Tuesday would be “intriguing”.

Shares of Sembcorp Industries were the top index gainer, rising 6.1 per cent to close at S$4.00. This follows an announcement on Monday that the group’s 80-per-cent-owned joint venture has clinched a contract to build, own and operate a 500 MW solar plant in Oman, which marks its first renewables project in the Middle East.

Meanwhile DFI Retail Group was the worst STI performer, falling 3.3 per cent to close at US$2.90.

Across the broader market, decliners outnumbered gainers 316 to 260, after 1.9 billion securities worth S$1.7 billion were traded.

The local banking trio continued to be actively traded, but their share prices remained under pressure. UOB fell 1.6 per cent and DBS dropped 1.1 per cent, while OCBC slipped 0.7 per cent on Tuesday.

Elsewhere in the region, markets ended in a sea of red following overnight losses on Wall Street, as investors continue to weigh the impact of failed banks in the US. Key indices in Shanghai, Hong Kong, South Korea, Australia and Japan fell between 0.7 and 2.6 per cent.