💰Dividend Picks丨S-REITs expected to deliver stronger returns: C38U/C2PU/AJBU
💰 Struggling to hold steady, U.S. markets saw volatile trends, with chip stocks helping to support.
💹 $CapLand IntCom T(C38U.SI)$ / $ParkwayLife Reit(C2PU.SI)$ / $Keppel DC Reit(AJBU.SI)$ : S-REITs are forecasted to experience a recovery in returns in 2025.
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| Market recap
On Tuesday, U.S. stocks started the day with broad gains, briefly dipped into negative territory, and then surged in the final hours, ultimately closing with modest gains. $NASDAQ Golden Dragon China Index(HXC)$ dropped 1.28%, while $XPeng Inc.(XPEV)$ climbed nearly 5%, and $PDD Holdings Inc(PDD)$ gained more than 3%.
Megacaps
$Tesla Motors(TSLA)$ and $NVIDIA(NVDA)$ showed relatively flat performances, while stocks like $Palantir Technologies Inc.(PLTR)$ and $Dell Technologies Inc.(DELL)$ saw more volatility, rising 5% and 6%, respectively.
Big deal
$Intel(INTC)$ surged 16.06%, marking its highest closing level since August 2024. Reports suggest that $Broadcom(AVGO)$ and $Taiwan Semiconductor Manufacturing(TSM)$ are in discussions about a potential deal to split Intel.
Asian markets today
$Straits Times Index(STI.SI)$ closed higher today, with leading gainers including $YZJ Shipbldg SGD(BS6.SI)$, $SEMBCORP INDUSTRIES LTD(U96.SI)$, and $Singtel(Z74.SI)$.
$HSTECH(HSTECH)$ struggled throughout the day. It initially plunged over 2% in early trading but quickly rebounded, turning positive before midday and ultimately closing up 0.59%. Semiconductor and humanoid robot concepts were particularly strong, with $JLMAG(06680)$ rising 27%, $HUA HONG SEMI(01347)$ gaining 23%, and $SMIC(00981)$ climbing more than 8%, hitting a new high.
The three major A-share indices showed a strong upward trend, accompanied by a broad rebound in tech stocks. Robot concept stocks surged, with $Zhejiang Changsheng Sliding Bearings Co.,Ltd.(300718)$ up 20%. The semiconductor industry chain saw a significant rise in the afternoon, with $Hua Hong Semiconductor Limited(688347)$ jumping 17% and $Will Semiconductor Co.,Ltd.Shanghai(603501)$ rising 10%.
| Another day, another big congrat to our reader
| Rising Yields
S-REITs are forecasted to experience a recovery in returns in 2025, driven by an improving global economy and growing investor interest in Real Estate Investment Trusts (REITs). As central banks continue to lower interest rates, S-REITs are poised to benefit from more favorable borrowing conditions and higher yields. This trend is expected to persist throughout the year, with several key factors contributing to the outlook for stronger performance.
A primary driver of this recovery is the easing of interest rates by central banks worldwide. As borrowing costs decrease, S-REITs benefit from reduced financing expenses, leading to improved profitability and higher yields. In addition, the low interest rate environment has led investors to seek more attractive returns, making S-REITs an appealing investment opportunity. This trend is further supported by increased demand for real estate, particularly in sectors such as office and retail properties.
The combination of lower borrowing costs and higher investor demand has created new opportunities for S-REITs, particularly as rents continue to rise and commercial real estate demand remains robust. Sub-sectors like office buildings and retail spaces have seen notable growth, strengthening the overall performance of S-REITs. These factors are expected to make S-REITs even more attractive to investors in 2025, bolstering confidence in their ability to deliver strong returns.
| Dividend Play: S-REITs
Singapore's 2025 Budget aims to boost sectors such as lending, consumption, and green energy, while also stimulating the stock market.
Key beneficiaries include the banking sector, real estate investment trusts (REITs), and the aviation industry.
CapitaLand Integrated Commercial Trust (C38U)
$CapLand IntCom T(C38U.SI)$ (CICT), listed on the Singapore Exchange since July 2002, was renamed following its merger with Keppel Commercial Trust in November 2020. CICT’s portfolio is comprised of premium, income-generating assets primarily in the commercial sector, including office and retail spaces, with a particular focus on Singapore.
Parkway Life REIT (C2PU)
$ParkwayLife Reit(C2PU.SI)$ is one of Asia’s largest healthcare REITs by asset size. The trust invests in income-generating properties related to healthcare and healthcare services. Its portfolio includes Singapore's largest private hospital collection, with notable facilities like Mount Elizabeth, Gleneagles, and Parkway East Hospitals. Additionally, Parkway Life REIT owns 59 high-quality nursing homes and care facilities across Japan.
Keppel DC REIT (AJBU)
$Keppel DC Reit(AJBU.SI)$ specializes in investments in income-generating properties used for data center purposes. It also holds assets that support the digital economy. The trust’s portfolio is diversified, featuring multi-tenanted, fully-fitted, shell-and-core, and network assets. Keppel DC REIT enhances its resilience by investing in both physical properties and debt securities, making it a strong performer in the growing digital infrastructure sector.
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