RHB has released a report titled “Market Strategy Positioning For S-REITs & High-Dividend Leaders,” which outlines a constructive yet selective approach to Singapore equities. The report indicates that the current economic environment, characterised by a benign inflation backdrop and anticipated cuts to the US Federal Funds Rate, is favourable for Singapore Real Estate Investment Trusts (S-REITs) and high-dividend equities.
The report suggests that the decline in the Singapore Overnight Rate Average (SORA) and 10-year yields will boost demand for S-REITs, particularly industrial and office REITs. It also highlights the potential for high-quality domestic income franchises in consumer staples, healthcare, and land transport sectors to benefit from regulator-supported initiatives aimed at increasing liquidity in small- and mid-cap stocks.
RHB maintains its 2025 GDP growth forecast for Singapore at 2%, with potential upside to 3%, driven by improved tariff clarity and a firmer risk appetite. However, the report advises caution due to uncertainties surrounding US-China trade policies and a potential slowdown in exports in the second half of 2025.
The report underscores the importance of prioritising high-quality, income-generating firms and suggests increased exposure to S-REITs and sustainable high-dividend equities. Analysts at RHB have identified top picks within the S-REIT sector, including AIMS APAC REIT, CapitaLand Ascendas REIT, and Keppel REIT, citing their potential for attractive returns.
In conclusion, RHB’s report provides a strategic framework for investors looking to capitalise on the current economic conditions in Singapore, with a focus on sectors poised for growth amidst declining interest rates.
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