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Business Times
20 hours ago
- Business
- Business Times
First Reit reports lower H1 DPU of S$0.0113 on FX depreciation, enlarged unit base
[SINGAPORE] The manager of First Reit reported a 5.2 per cent fall in H1 2025 distribution per unit (DPU) to S$0.0113 from S$0.012 in H1 2024 in a bourse filing on Tuesday (Jul 29). This comprises the Q1 2025 DPU of S$0.0058, which was paid on Jun 26, and Q2 2025 DPU of S$0.0055, which will be paid on Sep 25. Rental and other income for H1 2025 fell 2.9 per cent to S$50.5 million from S$52 million in H1 2024. This was mainly driven by the depreciation of the rupiah and yen against the Singapore dollar, and partially offset by higher rental income from assets in Indonesia and Singapore. As a result, net property and other income also fell in tandem, down 2.7 per cent to S$48.9 million in H1 2025 from S$50.3 million in H1 2024. Distributable amount fell 4.8 per cent to S$23.8 million in H1 2025 from S$25 million in H1 2024 on the same foreign currency depreciation. The fall in DPU was driven by these factors and an enlarged unit base from issuance of units as payment of management fees to the manager. The gearing ratio for First Reit rose slightly to 41.2 per cent, and interest coverage ratio remained at 3.7 times. The real estate investment trust has no refinancing requirements until May 2026, and has adopted hedging strategies to protect net cash flows from Indonesia and Japan. Currency volatility is expected to persist across Asia, influenced by the ongoing global trade uncertainties and domestic fiscal challenges. The rupiah and yen have both depreciated this year, with Bank Indonesia intervening in June and Bank of Japan signalling caution over additional rate hikes. 'The volatility and depreciation of the Indonesian rupiah against the Singapore dollar moderated our distributable income for the first half of 2025, despite Indonesia properties achieving a 5.5 per cent increase in rental income in local currency terms. This necessitates our continued focus on actively managing foreign currency risks and our capital management strategy,' said Victor Tan, executive director and CEO of the manager. Units of First Reit closed unchanged at S$0.28 on Tuesday.
Business Times
21 hours ago
- Business
- Business Times
First Reit H1 reports lower 2025 DPU of S$0.0113 on FX depreciation and enlarged unit base
[SINGAPORE] The manager of First Reit reported a 5.2 per cent fall in H1 2025 distribution per unit (DPU) to S$0.0113 from S$0.012 in H1 2024 in a bourse filing on Tuesday (Jul 29). This comprises the Q1 2025 DPU of S$0.0058, which was paid on Jun 26, and Q2 2025 DPU of S$0.0055, which will be paid on Sep 25. Rental and other income for H1 2025 fell 2.9 per cent to S$50.5 million from S$52 million in H1 2024. This was mainly driven by the depreciation of the rupiah and yen against the Singapore dollar, and partially offset by higher rental income from assets in Indonesia and Singapore. As a result, net property and other income also fell in tandem, down 2.7 per cent to S$48.9 million in H1 2025 from S$50.3 million in H1 2024. Distributable amount fell 4.8 per cent to S$23.8 million in H1 2025 from S$25 million in H1 2024 on the same foreign currency depreciation. The fall in DPU was driven by these factors and an enlarged unit base from issuance of units as payment of management fees to the manager. The gearing ratio for First Reit rose slightly to 41.2 per cent, and interest coverage ratio remained at 3.7 times. The real estate investment trust has no refinancing requirements until May 2026, and has adopted hedging strategies to protect net cash flows from Indonesia and Japan. Currency volatility is expected to persist across Asia, influenced by the ongoing global trade uncertainties and domestic fiscal challenges. The rupiah and yen have both depreciated this year, with Bank Indonesia intervening in June and Bank of Japan signalling caution over additional rate hikes. 'The volatility and depreciation of the Indonesian rupiah against the Singapore dollar moderated our distributable income for the first half of 2025, despite Indonesia properties achieving a 5.5 per cent increase in rental income in local currency terms. This necessitates our continued focus on actively managing foreign currency risks and our capital management strategy,' said Victor Tan, executive director and CEO of the manager. Units of First Reit closed unchanged at S$0.28 on Tuesday.
Malaysian Reserve
17-07-2025
- Business
- Malaysian Reserve
Emerging Asian bonds gain appeal as US tariffs cool inflation
DEMAND for emerging Asia's local bonds may improve along with the regional inflation outlook, as US tariffs prompt manufacturers to look for customers closer to home. Focusing more on local production could contain inflationary pressures. That also comes at a time when the region's long-dated yields — adjusted for inflation — are above historical averages, according to data compiled by Bloomberg. Attractive valuations and subdued inflation are likely to boost the appeal of Asian fixed income. 'Higher US tariffs will weaken export demand in EM Asia, leading to a shift in production for local markets instead, as the increase in the domestic supply of goods will keep local inflation in check,' according to Yifei Ding, a portfolio manager at Invesco Hong Kong Ltd. 'This will make EM Asia bonds more attractive' for domestic fixed-income investors. Easing domestic inflation may be a silver lining amid the whiplash of on-again, off-again US tariffs, as regional governments scramble to close trade deals with the US to protect their export-dependent economies. The outlook for domestic inflation will also depend on whether officials increase fiscal stimulus — and on the dollar's trajectory. At this point, regional price pressures remain manageable. They're within the price targets for Bank Indonesia and Reserve Bank of India, and below target for the Bank of Thailand, Bangko Sentral ng Pilipinas and the People's Bank of China. Inflation readings within the target ranges have fueled expectations that central banks across the region may either cut interest rates or maintain them. Several rate cuts this year in the region have helped pulled down nominal yields. However, debt from those countries is more appealing than usual. The Philippines 10-year yield, adjusted for the most recent inflation print, is 2.1 standard deviations above the five-year average. The same gauge for India is at 2.5, and Malaysia, Thailand and South Korea are around 0.60. 'EM Asia inflation being very subdued keeps valuations on a real basis attractive' in government bonds, said Rohit Garg, head of foreign-exchange and rates strategy Asia ex-Japan for Citigroup Inc. –BLOOMBERG
Reuters
16-07-2025
- Business
- Reuters
Indonesia central bank cuts benchmark rate, welcomes US tariff deal
JAKARTA, July 16 (Reuters) - Indonesia's central bank cut rates on Wednesday for the fourth time since September and said a revised tariff deal with the United States was positive for Southeast Asia's biggest economy amid weakening global trade and slowing domestic demand. Bank Indonesia (BI) cut the benchmark 7-day reverse repurchase rate (IDCBRR=ECI), opens new tab by 25 basis points to 5.25%, as expected by a slim majority of economists polled by Reuters, and also cut two other key rates. Governor Perry Warjiyo said the central bank would continue to observe room for more rate cuts, citing an expectation of low inflation through to 2026, a stable rupiah and bleak global economic outlook. "BI is already all out in boosting economic growth, including in supporting loan growth," the governor told a press conference. President Donald Trump's announcement of a tariff deal on Tuesday gave BI another reason to ease monetary policy, some analysts said. "External caution was counterbalanced by the fresh news over the trade deal," DBS Bank senior economist Radhika Rao said. "Policymakers have been opportunistic this year, prudently tapping periods of market stability to lower rates, with the latest move also coming against the backdrop of the successful completion of a trade deal with the U.S." The central bank welcomed the trade deal, where Indonesian exports would incur a 19% tariff instead of the 32% rate initially proposed by Washington, Warjiyo said. The deal was a positive development that would support exports and broader economic prospects as the central bank maintained its GDP growth forecast for 2025 at a range of 4.6% to 5.4%, he said. Warjiyo expressed optimism about Indonesia's export outlook after the revised U.S. tariff deal. "This deal will of course increase imports, but in our view, these are imports for productive purposes, which will in turn increase economic growth going forward," he said, adding certainty from the decision will also help with business decision making and prospects for capital inflows. Sluggish household spending saw Indonesia's growth weaken in the first quarter, while the outlook for subsequent quarters has been clouded by the impact of U.S. tariffs on global trade. In its easing cycle since September, BI had taken pauses in between rate cuts to try to head off volatility in the rupiah triggered by Trump's trade policies and geopolitical tensions, even as Indonesia's inflation remained muted. The rupiah , which has been rangebound so far this month, barely moved after BI's announcement, while the main stock index (.JKSE), opens new tab extended gains to trade almost 1% up. Brokerage Mandiri Sekuritas expects another 25-bp cut this year and 50-bp more in the first quarter of 2026 to counter weakening economic activity, its economist Rangga Cipta said. "BI maintained a dovish tone, emphasising the need to support economic growth," he said.
Business Times
16-07-2025
- Business
- Business Times
Indonesia's central bank cuts benchmark rate by 25 basis points to 5.25%
[JAKARTA] Indonesia's central bank cut its benchmark interest rate for the third time this year, shortly after the country finalised a trade deal with the US that sets a 19 per cent tariff on goods from South-east Asia's largest economy. Bank Indonesia (BI) on Wednesday (Jul 16) lowered its benchmark rate by 25 basis points to 5.25 per cent, aligning with market consensus compiled by Reuters. It also reduced its overnight deposit and lending facility rates to 4.5 per cent and 6 per cent, respectively. BI governor Perry Warjiyo said the decision was driven by low inflation – which remained within the target range – and the continued stability of the rupiah, in line with its fundamentals as well as the ongoing need to support economic growth. Inflation in June stayed near the bottom of the central bank's target range of 1.5 to 3.5 per cent. Warjiyo also expressed support for the recently concluded trade agreement, saying it would boost sentiment for Indonesia's exports and economic growth, while providing greater clarity for financial markets. BI estimates Indonesia's gross domestic product growth will reach 5 per cent this year, slightly below the target of 5.2 per cent. The rupiah slipped 0.1 per cent to 16,278 against the US dollar on Wednesday, while the Jakarta Composite Index maintained its upward momentum after the tariff deal was sealed, gaining 0.72 per cent at the close. A NEWSLETTER FOR YOU Friday, 8.30 am Asean Business Business insights centering on South-east Asia's fast-growing economies. Sign Up Sign Up Analysts said that BI may keep the door open for further rate cuts later this year, as it aims to bolster growth amid mounting global uncertainties and signs of slowing domestic demand. Indonesia's economy is under mounting pressure from weakening consumption – a crucial growth driver, as evidenced by a decline in retail sales during the second quarter of this year. Lavanya Venkateswaran, Asean economist at OCBC, said the rate cut was broadly expected and reflects BI's continued focus on sustaining growth momentum amid rising global and domestic headwinds. OCBC projects Indonesia's GDP growth to moderate to 4.7 per cent in 2025 from 5 per cent in 2024, amid weaker external demand and slowing domestic consumption. 'BI clearly left the door open for further cuts, the timing of which will be tied to rupiah stability,' Venkateswaran added. On Tuesday, US President Donald Trump announced the completion of a trade deal with Indonesia, under which Indonesian goods will face a reduced tariff of 19 per cent – down from the previously threatened 32 per cent – while US exports will be exempt from any levies. Indonesia became the fourth country to clinch a pact with the US, after the UK, Vietnam and China – though Beijing's agreement with Washington remains a truce. South-east Asia's largest economy reportedly committed to purchasing US$15 billion in US energy exports and US$4.5 billion in agricultural goods, alongside increasing its orders for Boeing aircraft. While uncertainty surrounding Trade War 2.0 has begun to ease, supported by the latest trade deal, Permata Bank chief economist Josua Pardede cautioned that questions remain about the future direction of the Federal Reserve's policy rate. This is especially as Trump's tariff strategy could further intensify inflationary pressures in the US. In the near term, these factors may dampen capital inflows to riskier emerging market assets, including Indonesia, potentially curbing the rupiah's recent gains. 'As a result, BI may take a more cautious approach before pursuing further aggressive rate cuts,' Pardede said, adding that there was still room for the central bank to cut rates by an additional 25 to 50 basis points over the remainder of the year.
