Rising appeal of S-Reits as near-term defensive play amid inflation

THE regional and global reopening of international borders and domestic economies looks likely to bode well for business and tourism. But market watchers say there are still more headwinds ahead for Singapore stocks.

“(Singapore’s) equity market outlook will depend on how well stocks and sectors deal with supply chain disruptions caused by the Russia-Ukraine war and China’s zero Covid-19 policy, uncertainty over the rate of rise in inflation, and the resultant expectations of rapid rises in interest rate hike for the rest of 2022,” said RHB analyst Shekhar Jaiswal.

Real estate investment trusts (Reits) is one of the defensive sectors that RHB is banking on – alongside the consumer, financials, industrials, transport, and manufacturing and technology sectors – that could potentially benefit from the rising interest rates cycle and provide a foil against rising inflation.