Wayneqq
2021-10-17

$KEPPEL DC REIT(AJBU.SI)$So… the relationship between how attractive REITs is compared to high quality bonds such as those issued by treasury… the result of tapering and raising of interest rates are:

1) Fed tapers bond buying -> bond yield rises because less buyers, so yields go up to attract more buyers.

2) Bonds guarantee capital, so safer than REITs, more people buy bonds instead of REITs.. REITs price drops

3) Feds raise interest rates -> Debt servicing becomes more expensive.. REITs borrow to finance their property acquisition.. so rising interest means more income needed to pay down the interest..means less overall income for distribution to shareholders means drop in dividends payout and REITs becomes less attractive

So… with the upcoming tapering and the potential rise of interest rates by the feds.. will we see adecline in REITs prices? [Thinking] 

@Tiger Stars

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精彩评论

  • SteadyDoesIt
    2021-10-17
    SteadyDoesIt
    Likely in the short term but prices will likely recover after a few months
    • Anh: 
      Concur with this assessment. But for Keppel DC REIT, issue is its diversification into non-DC territory and power consumption restrictions.
    • Wayneqq回复Anh: 
      Do you think it is a good thing to diversify into non-DC area or is bad?
  • ychong87
    2021-10-18
    ychong87
    uncle and auntie stock.
    • Wayneqq: 
      What do you mean? A lot of auntie and uncle buying? Or is slow growing?
  • yoongmy
    2021-10-17
    yoongmy
    this is well known trend and market already price in. (fund keep moving out).
    • Wayneqq: 
      Good to know that it is a known trend.. [Strong]
  • MHh
    2021-10-17
    MHh
    Likely to fall. But there will still be buyers for the dividends
    • leeWT: 
      Yes, likely to fall, no longer a pure play in DC field
  • MartinKuah
    2021-10-23
    MartinKuah
    holding this counter very long. unrealise lose a lot.
    • Wayneqq: 
      You could try to average down or just hold it for dividends.. think of dividends as slowly getting back your capital
  • Olegarki
    2021-10-19
    Olegarki
    PlEase like back
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