Friday, July 11th, 2025

Overview of the 50 bp Rate Cut:

Overview of the 50 bp Rate Cut:

  • The 50 bp rate cut announced recently was in line with market expectations.
  • Following this announcement, U.S. investors reacted by “Selling The Rate Cut News,” which led to some market fluctuations.
  • The rate cut marks the beginning of the rate-cutting cycle, with another 50 bp cut expected by the end of 2024 and an additional 100 bp cut forecasted by the end of 2025.

Impact on Singapore Banks:

  • Singapore’s banking sector, including DBS, OCBC, and UOB, has been rated as “Neutral”.
  • This stance reflects the expected impact of lower interest rates on banks’ net interest margins (NIM), which could be pressured by the ongoing rate cuts.
  • Despite this, Singapore banks remain fundamentally strong, and the neutral recommendation suggests that their current valuations account for these anticipated changes in the interest rate environment.

Investment Recommendations:

  • Investors are advised to “Add/Accumulate” fixed income proxies such as REITs during periods of weakness.
  • This recommendation is driven by the fact that REITs typically benefit from a lower interest rate environment, as their cost of capital decreases, potentially leading to higher yields and stronger performance.

The combination of further rate cuts and the current market sentiment indicates a strategic opportunity for investors to pivot towards fixed income assets like REITs, while adopting a neutral stance on the banking sector

Thank you

IRPC Q3 Earnings: Net Loss Widens Amid Challenging Market Conditions | I-TAIL Reports Solid Growth

Thailand Daily Market Insights: IRPC’s 3Q24 Performance and I-Tail Corporation’s Earnings Analysis Thailand Daily Market Insights: IRPC’s 3Q24 Performance and I-Tail Corporation’s Earnings Analysis Date: Wednesday, 06 November 2024 Broker: UOB Kay Hian Securities...

Why did Singapore REITs drop today?

The performance of Singapore Real Estate Investment Trusts (REITs) is influenced by various factors, including global economic policies and interest rates. A victory for Donald Trump in the U.S. presidential election could lead to...

AMMB Holdings: Resilient Capital Base Despite Cancelled Insurance Deal – Top Bank Pick

Comprehensive Analysis of AMMB Holdings and Sector Insights Comprehensive Analysis of AMMB Holdings and Sector Insights Date of Report: February 4, 2025 Broker: Maybank Investment Bank Berhad AMMB Holdings: Maintaining a Healthy Growth Trajectory...