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Business Times
6 days ago
- Business
- Business Times
US tariffs put spotlight on industrial S-Reits' upcoming H1 earnings
[SINGAPORE] Market watchers remain cautious on the performance of industrial Singapore-listed real estate investment trusts, or S-Reits, ahead of the sector's upcoming financial results – given uncertainty around the impact of the US administration's global tariffs. 'Rental growth in the industrial sector may ease in the current tariff-related uncertainty,' said Xavier Lee, an equity analyst from Morningstar. The US administration has set an Aug 1 deadline to conclude tariff negotiations with other countries. After that, exports to the US from these countries will face new tariffs, starting at a baseline rate of 10 per cent. However, Krishna Guha, analyst at Maybank Securities, said that the impact on the industrial sub-sector could be cushioned by the 'front-loading' of inventory – where suppliers stock up on inventory early – to mitigate changes in tariffs. Industrial S-Reits posted mixed figures in their most recent results. While Mapletree Logistics Trust saw its Q4 FY2025 distribution per unit (DPU) fall 11.6 per cent, CapitaLand Ascendas Reit posted a 3.2 per cent rise in its FY2024 H2 DPU. The reporting season for S-Reits kicks off on Jul 23 with Sabana Industrial Reit reporting its H1 business update after market close. Others include Digital Core Reit on the same day, as well as Suntec Reit on Jul 24. A NEWSLETTER FOR YOU Tuesday, 12 pm Property Insights Get an exclusive analysis of real estate and property news in Singapore and beyond. Sign Up Sign Up More counters will report their H1 financial results the following week, including Keppel Pacific Oak US Reit on Jul 29, Keppel Reit on Jul 30 and Capitaland Integrated Commercial Trust on Aug 5. S-Reits under the Frasers and Mapletree groups will be reporting their Q3 and Q1 results, respectively. Mapletree Industrial Trust will release its results on Jul 28 while Frasers Centrepoint Trust will report on Jul 24. Besides the industrial sector, Morningstar's Lee said that leasing demand for office S-Reits could also fall given the economic uncertainty from ongoing trade tensions. But unlike the industrial sector, the tight office supply in Singapore could offset weak demand for office spaces, he added. For the hospitality sector, Maybank's Guha was of the view that it may see some positive impact from recent concerts, although the US tariffs could weigh down business and leisure travel. Guha added that Singapore-focused S-Reits will have a 'home advantage' as they are sheltered from the impact of the broader growth slowdown due to trade tensions. More S-Reits to post DPU growth Overall, more S-Reits are likely to report growth in their DPU as they benefit from year-on-year interest cost savings, said Darren Chan, senior research analyst at Phillip Securities Research. He noted that S-Reits are benefiting from last year's US Federal Reserve rate cuts, which lowered borrowing rates by 100 basis points. The three-month Sora, an interest-rate benchmark for Singapore dollar loans, has also fallen below 2 per cent – its lowest level since 2022. 'Looking ahead, S-Reits are expected to enjoy further interest cost savings as more rate cuts are anticipated later this year,' said Chan. On the other hand, Morningstar's Lee believes that US Fed rate cuts may have limited impact on S-Reits this year. This is because most of these Reits have a larger share of fixed-rate debt, which is less sensitive to rate changes than floating-rate debt. Among the S-Reits covered by Morningstar, the proportion of fixed-rate debt ranges from 58 to 83 per cent of total debt. 'However, the lower interest rates should start becoming meaningful in the subsequent 12 to 18 months as S-Reits refinance expiring debt,' said Lee. Nevertheless, he agreed with other analysts that the majority of S-Reits will post positive DPU growth of between 1 and 7 per cent for FY2025. This will mainly be driven by a mix of organic improvements to S-Reits' portfolio and acquisitions, rather than interest cost savings, said Chan. Maybank Securities maintains its positive view of S-Reits on the back of falling interest rates and 10-year yield. These factors should support these Reits' distributions and valuation even if there is pressure on their revenue, said Guha. Maybank Securities prefers, in the following order: retail, office, industrial and hospitality sub-sectors.
Bangkok Post
08-07-2025
- Business
- Bangkok Post
Struggling US-Thai talks hit sentiment
Weaker market sentiment is expected as initial US-Thailand trade negotiations stalled, while Washington's announcement of a 10% tariff on BRICS members has raised concerns over escalating trade tensions. Late on Friday, Finance Minister Pichai Chunhavajira admitted the US and Thailand have not reached a trade deal after the first face-to-face meeting last week. The setback comes as media outlets reported the US is considering a curb on artificial intelligence (AI) chip exports to Malaysia and Thailand as it is worried the two countries will re-route the products to China. The outlook remains uncertain, particularly with the US planning to impose tariffs of up to 36% on countries with significant trade surpluses, including Thailand. The initial negotiation round, led by Mr Pichai, ended without progress, prompting the US to extend the negotiation deadline from July 9 to Aug 1. Adding to the pressure, the US warned of an additional 10% tariff hike on countries associated with the BRICS bloc, of which Thailand has applied for membership. This could push Thailand's total import tariff rate to 46%, significantly hampering trade and investment flows. Thailand has roughly three weeks to prepare for further negotiations. Based on reference rates from countries that have successfully concluded talks, Thailand could negotiate a tariff reduction of 50% from the rate the US initially proposed, said Soraphol Tulayasathien, senior executive vice-president of the Stock Exchange of Thailand (SET). He said he still believes Thailand can succeed in the talks. "The SET has contingency plans to manage market volatility, including adjustments to trading measures such as ceiling and floor limits as well as circuit breakers," said Mr Soraphol. "We don't expect investors to panic to the same extent as when the US first announced tariffs in April." Kitichan Sirisukarcha, director of investment solutions at Maybank Securities (Thailand), forecasts the US may agree to reduce the tariff rate to around 18%, potentially split between direct and indirect export tariffs on China-linked goods. In light of the trade risks, Maybank cut Thailand's 2025 GDP growth forecast to 1.8%, down from 3%, and its SET index target to 1,290 points, from 1,400. KGI Securities (Thailand) said its baseline view is Thailand is likely to receive a tariff rate exceeding 20%, more than Vietnam's tariff, with a 20% rate or lower less likely. "We expect a slightly positive market impact as most economists have priced in tariff rates of 15-20% in their 2025 GDP projections," noted the brokerage. However, near-term upsides may be limited by curbs on AI chips to Thailand, according to KGI. If Thailand is not on the list of countries facing unilateral tariff rates, and the grace period for the 10% tariff is extended to allow further negotiations, then trade uncertainties will be prolonged, said the brokerage.
Forbes
02-07-2025
- Business
- Forbes
Fortune Of Thai Building Supplies Magnate Takes Hit As Consumers Turn Thrifty
Witoon Suriyawanakul. Bangkok post This story is part of Forbes' coverage of Thailand's Richest 2025. See the full list here . Sliding shares of Siam Global House, which owns the Global House chain of building-materials and DIY stores, nearly halved the net worth of founder Witoon Suriyawanakul to $475 million. Net profit slumped 11% in 2024 to 2.3 billion baht ($71 million) while revenue stagnated at 33 billion baht amid weak consumer spending and higher costs related to distribution, staffing and store openings. In the first quarter of 2025, tepid same-store sales growth slashed net profit by 14%. The company, run by Witoon as CEO, plans to open seven new outlets in Thailand in 2025, taking the total to 99, including two in Cambodia. However, further regional expansion is on hold for now: In December, the company's joint venture to launch the DIY chain in the Philippines with Manila-based Cosco Capital, owned by rich listers Lucio and Susan Co, was called off. In an April report, Suttatip Peerasub, an analyst at Maybank Securities (Thailand), predicted flat net profit and revenue for 2025 .
Free Malaysia Today
19-06-2025
- Business
- Free Malaysia Today
Malaysia's forex reserves at 3-year high to aid ringgit stability
The ringgit has been Southeast Asia's top performer this quarter, after the Singapore dollar. (EPA Images pic) KUALA LUMPUR : Malaysia's increasing currency reserves are bolstering its defenses against market volatility. The country's net foreign exchange (forex or FX) reserves rose to US$94.7 billion at the end of April, according to the latest central bank data, the most since June 2022. Strong foreign inflows into local bonds and a weaker greenback, which enabled Bank Negara Malaysia to unwind its net short forward FX position, both helped. These factors have strengthened the nation's bulwark against external shocks. 'The narrowing net shorts in FX forward book, combined with higher headline reserves, means that net reserves are rising at a faster pace,' said Winson Phoon, head of fixed-income research at Maybank Securities Pte Ltd, adding that Malaysia's improving external resilience 'helps support ringgit stability'. The extra buffer may be coming at a fortuitous time. US President Donald Trump's tariffs, Sino-American tensions and geopolitical uncertainty have boosted currency volatility, and a weakening of the US dollar has changed the FX dynamic for emerging markets. As a trade-dependent economy, Malaysia and its currency are particularly vulnerable to trade tensions between its two largest export destinations – US and China. The recent boost in foreign reserves comes partially from the US$5 billion foreign inflow into the nation's conventional government securities in this quarter so far. That's on track to be the largest quarterly inflow on record in data going back to 2005. Global funds have poured in amid optimism over the outlook of the ringgit and on rate-cut wagers, as BNM is the last rate-cut holdout in Southeast Asia. The situation is different from December. Back then, BNM's net short forward FX book had widened to US$29.2 billion – just 0.2% shy of an all-time low – as the central bank utilised currency forwards to support the ringgit. Global funds pulled out of Malaysian bonds for a fourth straight month. In addition, the ringgit was the second-worst performer in emerging Asia in the final quarter of 2024, trailing only the won. BNM pared back its net short forward book position to US$24 billion in April, the narrowest since February 2024. The unwinding, which involves selling the local currency and buying the dollar, hasn't impacted the spot ringgit's performance so far. In fact, the ringgit is Southeast Asia's top performer this quarter, after the Singapore dollar. 'A gradual pare-down of net short forward positions shouldn't create major headwinds for ringgit strength,' Maybank's Phoon added.
Business Times
19-06-2025
- Business
- Business Times
Malaysia FX reserves at three-year high to aid ringgit stability
[KUALA LUMPUR] Malaysia's increasing currency reserves are bolstering its defences against market volatility. The country's net foreign exchange (FX) reserves rose to US$94.7 billion at the end of April, according to the latest central bank data, the most since June 2022. Strong foreign inflows into local bonds and a weaker greenback, which enabled Bank Negara Malaysia (BNM) to unwind its net short forward FX position, both helped. These factors have strengthened the nation's bulwark against external shocks. 'The narrowing net shorts in FX forward book, combined with higher headline reserves, means that net reserves are rising at a faster pace,' said Winson Phoon, head of fixed-income research at Maybank Securities, adding that Malaysia's improving external resilience 'helps support ringgit stability'. The extra buffer may be coming at a fortuitous time. US President Donald Trump's tariffs, Sino-American tensions and geopolitical uncertainty have boosted currency volatility, and a weakening of the US dollar has changed the FX dynamic for emerging markets. As a trade-dependent economy, Malaysia and its currency are particularly vulnerable to trade tensions between its two largest export destinations – US and China. The recent boost in foreign reserves comes partially from the US$5 billion foreign inflow into the nation's conventional government securities in this quarter so far. That's on track to be the largest quarterly inflow on record in data going back to 2005. 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 Global funds have poured in amid optimism over the outlook of the ringgit and on rate-cut wagers, as BNM is the last rate-cut holdout in South-east Asia. The situation is different from December. Back then, BNM's net short forward FX book had widened to US$29.2 billion – just 0.2 per cent shy of an all-time low – as the central bank utilised currency forwards to support the ringgit. Global funds pulled out of Malaysian bonds for a fourth straight month. And the ringgit was the second-worst performer in emerging Asia in the final quarter of 2024, trailing only the won. BNM pared back its net short forward book position to US$24 billion in April, the narrowest since February 2024. The unwinding, which involves selling the local currency and buying the dollar, has not impacted the spot ringgit's performance so far. In fact, the ringgit is South-east Asia's top performer this quarter, after the Singapore dollar. 'A gradual pare-down of net short forward positions shouldn't create major headwinds for ringgit strength,' Maybank's Phoon added. BLOOMBERG
