An uneasy calm has decended over the market. Market participants in the IPO of Digital Core REIT heaved a sigh of relief at its successful debut on Dec 8. S-REITs with US assets have had a challenging two years, trading at higher yields than other S-REITs. Moreover, the failure of Eagle Hospitality Trust has led investors to look upon US sponsors with caution.
The Federal Open Market Committee Meeting or FOMC on Dec 13-14 is widely expected to indicate some quatitative tightening. The FOMC could also indicate that the Federal Funds Rate could see its first hike in mid-2022.
The local market has stabilised after Nov 30, when Sea’s weightage in MSCI Singapore rose to 50%. This re-weighting caused the Straits Times Index to fall sharply to 3,041. The STI remained relatively steady during the week of Dec 6-10, ending the week at 3,135. At this level, the STI remains below the confluence of the 100- and 200-day moving averages at 3,142. The index needs to regain the 3,142 level to have any chance of upside breakouts.