Although there has been little “pass-through” from heightened US rates since early 2025, three-month compounded Sora appears to have found a floor at 1.02% in late April and has since moved to 1.08% as of June 19. In addition, the yield of the 10-year Singapore government bond rebounded from 1.91% in mid-Feb to 2.06% as of June 19. REITs' unit prices depend on the difference between their DPU yields and risk-free rates.
Against this background, the FTSE REIT Index is unlikely to catch up with the Straits Times Index’s performance this year despite a spate of reports suggesting that S-REITs could experience something of a comeback. The most positive reading of the REIT Index’s chart is that prices are attempting to bottom at 660 compared to its last done price of 669 on June 19. Some positive divergences have developed between quarterly momentum and price, and 21-day RSI and price. But the chart pattern doesn’t point to the index nearing a breakout level.
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The STI closed at 5,192, up 167 points week-on-week despite declining by 20 points on Friday, June 19. The chart pattern continues to look positive when measured against the STI’s 50- and 100-day moving averages, which in turn had drawn together, and are currently drawing apart as they rise. This is often a bullish signal. The upside remains at 5,740, and the support level of the current swing has been established at 5,000.
