Top Stories
Sector Update | REITs
S-REITs are actively recycling assets, supported by advantageously low domestic interest rates. The sector is defensive and provides an attractive yield spread of 3.2%, which is in line with the long-term mean. Maintain OVERWEIGHT. The SREIT sector is a major laggard. BUY blue-chips that are catching up with the broader market: CICT (Target: S$3.06), FLT (Target: S$1.33), MPACT (Target: S$1.75), NTTDCR (Target: US$1.43) and UIBREIT (Target: S$1.16).
Company Results | Seatrium (STM SP/HOLD/S$2.15/Target: S$2.30)
1H26 reported net profit of S$373m (+158% yoy) was boosted by one-off disposal gains. Core earnings (S$207m) rose 35% yoy, still a beat. 2H26 is likely stronger, driven by further GPM improvement and cost initiatives achieved from recent asset disposals. However, current weak orderbook on hand offers no good revenue visibility beyond 12 months. Seatrium needs some sizeable contract wins in 2H26 to bolster investor confidence. Downgrade to HOLD, with target price lowered to S$2.30, based on 1.05x 2026 P/B.
Company Update | Frasers Logistics & Commercial Trust (FLT SP/BUY/S$0.99/Target: S$1.33)
The logistics portfolio maintained near-full occupancy at 99.7% as of Jun 26. It generated positive rental reversion of 11.9% on an incoming-versus-outgoing basis (Sydney: 8.8%, Melbourne: 29% and Germany: 3%). The acquisition of four freehold logistics properties in Europe is expected to be 1.7% DPU accretive. Maintain BUY. Target price: S$1.33.
Market Spotlight
- US stocks were higher on Friday, with all indices rising as consumer discretionary, communication services and industrials sectors rose. There were more decliners than advancers on both the NYSE and NASDAQ.
- The SSTI fell 45.08 points to 5,628.50, supported by weakness in Singtel and DBS, with both mid- and small-cap indices rising with a broad market decline on S$2.56b turnover.
Technical Analysis
Capitaland Investment | CLI SP
Trading Buy Range: S$2.64-2.65
Singapore Tech Engineering | STE SP
Trading Sell Range: S$10.27-10.28
Top Stories
Sector Update | REITs
S-REITs are actively recycling assets, supported by advantageously low domestic interest rates. The sector is defensive and provides an attractive yield spread of 3.2%, which is in line with the long-term mean. Maintain OVERWEIGHT. The SREIT sector is a major laggard. BUY blue-chips that are catching up with the broader market: CICT (Target: S$3.06), FLT (Target: S$1.33), MPACT (Target: S$1.75), NTTDCR (Target: US$1.43) and UIBREIT (Target: S$1.16).
Company Results | Seatrium (STM SP/HOLD/S$2.15/Target: S$2.30)
1H26 reported net profit of S$373m (+158% yoy) was boosted by one-off disposal gains. Core earnings (S$207m) rose 35% yoy, still a beat. 2H26 is likely stronger, driven by further GPM improvement and cost initiatives achieved from recent asset disposals. However, current weak orderbook on hand offers no good revenue visibility beyond 12 months. Seatrium needs some sizeable contract wins in 2H26 to bolster investor confidence. Downgrade to HOLD, with target price lowered to S$2.30, based on 1.05x 2026 P/B.
Company Update | Frasers Logistics & Commercial Trust (FLT SP/BUY/S$0.99/Target: S$1.33)
The logistics portfolio maintained near-full occupancy at 99.7% as of Jun 26. It generated positive rental reversion of 11.9% on an incoming-versus-outgoing basis (Sydney: 8.8%, Melbourne: 29% and Germany: 3%). The acquisition of four freehold logistics properties in Europe is expected to be 1.7% DPU accretive. Maintain BUY. Target price: S$1.33.
Market Spotlight
- US stocks were higher on Friday, with all indices rising as consumer discretionary, communication services and industrials sectors rose. There were more decliners than advancers on both the NYSE and NASDAQ.
- The SSTI fell 45.08 points to 5,628.50, supported by weakness in Singtel and DBS, with both mid- and small-cap indices rising with a broad market decline on S$2.56b turnover.
Technical Analysis
Capitaland Investment | CLI SP
Trading Buy Range: S$2.64-2.65
Singapore Tech Engineering | STE SP
Trading Sell Range: S$10.27-10.28
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