Stocks with leveraged balance sheets would also benefit from lower interest rate costs, add JPM analysts, but broad monetary easing will spell trouble for local banks via lower net interest margins.
Singapore REITs are expected to be key beneficiaries of consecutive Singapore dollar nominal effective exchange rate (S$NEER) slope reductions, which have translated into a 80 to 100 basis points (bps) decline in various interest rates, according to JP Morgan (JPM) in a July 2 Asean equity strategy report.
Factors including rising vacancies, falling prices and foreign exchange loss affecting overseas-focused or trade-exposed REITs can also serve to benefit Singapore-focused REITs.
