One gauge of market activity - or quality if you prefer - is the average value per unit traded. This is obtained by dividing the dollar value by turnover, the resulting number giving an idea of where the market's energies or interests were for the session in question.
For most of the first quarter of 2014 this statistic was well under S$0.50, indicating a preference for lower-priced or penny stocks. In the early part of this year, the figure hovered around S$1, which indicated a shift towards higher-priced issues - a shift that could roughly be interpreted to show a move from low- to higher-quality issues.
In Monday's session, however, dollar volume of S$959 million from unit volume of 1.6 billion yielded an average value of S$0.60 per unit traded, an uncomfortable result for those who were hoping the shift to higher-priced stocks would continue.
The Straits Times Index in the meantime, managed a 4.16 points gain at 3,454.26 on the second last trading day of the quarter, not a great outcome for those who bought at the end of last week in anticipation of a window-dressing push, but then again, there is still one more day to go. It was the index's fifth consecutive rise and the advance-decline score was 228-188 excluding warrants.
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REITs, Stapled and Business Trusts Offer High Yields
The 28 REITs listed on SGX have averaged a 4.6% YTD gain, similar to 11 listed Business Trusts average 5.7% YTD advance - bringing their average one-year total return to 18.4% each. The six listed Stapled Trusts have posted an average 2.1% YTD gain, taking their average one-year total return to 10.5%.
The average dividend yield for REITs is 6.2%, with 6.3% for Business Trusts, and 7.3% for Stapled Trusts, all of which are more than twice the yield of the Singapore Fixed Income Index (SFI) at 2.9%.
Dividend and yield stocks have remained in focus amid expectations that the Federal Reserve will raise rates slowly and cautiously this year. Rising interest rates affect REITs because they increase borrowing costs and could result in lower distribution per unit (DPU) yields and reduced asset values.
Dividend and yield stocks have remained in focus amid expectations that the Federal Reserve will raise rates slowly and cautiously this year. Rising interest rates affect REITs because they increase borrowing costs and could result in lower distribution per unit (DPU) yields and reduced asset values.
Singapore is the largest Real Estate Investment Trusts (REITs) hub in Asia Pacific ex-Japan, with 28 REITs, 11 Business Trusts and six Stapled Trusts listed on SGX, reflecting total market capitalisation of more than $83 billion. Over 70% of the REITs and property trusts own assets across Asia and Europe.
REITs invest in a wide range of diversified real estate assets such as office, residential, retail, hospitality, industrial properties or hi-tech parks. REITs listed on SGX that distribute at least 90% of their distributable income to the unit holders are granted tax transparency by IRAS and taxed only in the hands of unit holders.
As maintained by the Monetary Authority of Singapore (MAS), a Business Trust is a trust that runs and operates a business enterprise. Registered Business Trusts must have a trustee-manager whose role is to safeguard the interests of beneficiaries (referred to as ‘unit holders’ under the Business Trusts Act) of the trust and to manage the business of the trust (click here for more information).
Business Trusts offer investors a way to invest in cash-generating assets, including infrastructure, real estate and transportation assets. The 11 Business Trusts are made up of four Property Trusts, four Infrastructure Trusts, two Shipping Trusts and a Specialty Trust. The Property Trusts are Ascendas India Trust, Indiabulls Trust, Religare Health Trust and Croesus Retail Trust. The Infrastructure Trusts also consist of four trusts - CitySpring Infrastructure Trust, Keppel Infrastructure Trust, Hutchison Port Trusts and Asian Pay TV Trust. The Shipping Trusts comprise Rickmers Maritime and First Ship Lease Trust. The only specialty trust is Accordia Golf Trust.
The 28 REITs listed on SGX have averaged a 4.6% YTD gain, while the 11 listed Business Trusts have averaged a 5.7% YTD advance, bringing their average one-year total return to 18.4% each. The six listed Stapled Trusts have posted an average 2.1% YTD gain, taking their average one-year total return to 10.5%.
