The FTSE REIT Index is testing a well-established resistance at 633, and momentum may finally be tilting toward a breakout. Analysts note that both short- and medium-term indicators have strengthened, but caution that the move lacks the necessary volume to sustain a breakout. Should the breakout occur, the next resistance target is seen at 690 — a potential short-term upside of 9%.
The missing piece could be volume, which may follow a backdrop of lower interest rates. On March 21, the benchmark 10-year US Treasury yield dipped over 3 basis points to 4.20%, while the 2-year yield slipped more than 2 basis points to 3.929%. The decline reflects ongoing economic uncertainty and inflation concerns, as President Donald Trump intensifies his trade tariff campaign.
At the March 19 FOMC meeting, the Federal Reserve left the Fed funds rate unchanged at 4.25%-4.50%. However, its latest economic projections revised US GDP growth down to 1.7% (from 2.1%), core PCE inflation up to 2.8% (from 2.5%), and the unemployment rate higher at 4.4% (from 4.3%) for 2025. Fed Chair Jerome Powell reiterated that the base case sees tariffs as having only a temporary inflationary impact.
DBS Group Research believes this could be a turning point for S-REITs. “Interest rates in Singapore have retreated; SORA and 10-year yields are entering a ‘Goldilocks zone’ for S-REITs to refinance with savings and/or pursue selective growth,” DBS states.
The Singapore 10-year government securities yield now stands at 2.75%, while the 3-month compounded SORA is at 2.33%, creating favorable conditions for S-REIT refinancing and expansion. DBS expects S-REITs to benefit in this lower growth, lower interest rate environment.
DBS is bullish on S-REITs, with a sector preference ranking of retail, industrial, office, and hotels. Its top picks include Frasers Centrepoint Trust, CapitaLand Integrated Commercial Trust, Mapletree Industrial Trust, Mapletree Logistics Trust, Keppel DC REIT, and ParkwayLife REIT. These names, DBS says, are positioned to deliver earnings surprises from falling base rates and are resilient even in a potential recession scenario.
Meanwhile, consolidation is taking hold in mainland Chinese equities. Unconfirmed reports of a European Commission probe into BYD’s Hungarian electric vehicle plant sent BYD shares plunging 7%, dragging down the Nikko AM-Straits Trading Electric Vehicle ETF (EVS) and triggering a broader sell-off in the Hang Seng Tech Index.
The Lion-OCBC Securities HSTECH ETF faced resistance at $1 and entered a consolidation phase, closing the week of March 17-21 at 93.9 cents with support seen at 91 cents. A successful breakout above $1 could target $1.22, still below its listing high of $1.33.
EVS, meanwhile, is likely to find support between 48.5 cents and 49 cents after ending the week at 49.5 cents.
The pullback in Chinese stocks is expected to be short-lived — perhaps lasting two weeks — before the rally broadens beyond tech into consumer, banking, and infrastructure sectors. There are also signs that the long-depressed property sector may be nearing a bottom.
Technically, the Lion-OCBC Securities China Leaders ETF broke past strong resistance at $1.78 two weeks ago, turning that level into new support. Analysts see further upside to $1.95, with a longer-term target of $2.04.
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