Market Overview

The global financial markets have witnessed mixed performances as of January 9, 2025. The FSSTI Index in Singapore closed at its 52-week high of 3,887.0, gaining 1.5% in a day and 2.6% for the year-to-date. Comparatively, other indices like the Dow Jones (+0.3%) and S&P 500 (+0.2%) saw modest gains, while the Hang Seng Index (-0.9%) and Shanghai Composite Index (0.0%) struggled.

The commodities market saw fluctuations, with crude oil dipping by 1.3% to \$73.3 per barrel and crude palm oil down by 0.6% at \$4,329.0. Gold remained stable at \$2,661.8 per ounce. Meanwhile, bond yields have been a focal point amid rising interest rate concerns globally, with the US 10-year bond yield at 4.7% and Singapore’s 10-year bond yield rising by 0.8% to 3.0%.

Key Highlight: Federal Reserve’s Policy Focus

The Federal Reserve’s December 2024 meeting minutes revealed a cautious approach to monetary policy, with plans to gradually reduce interest rates in 2025. Concerns over elevated inflation, strong spending, and labor market resilience were highlighted as factors influencing this strategy. These discussions, along with political uncertainties such as potential tariff impositions by President-elect Donald Trump, have created a cautious investment environment.

Company-Specific Analysis

Suntec REIT

Suntec REIT announced a revised offer price of \$1.19 per share in cash, following consultations with their joint financial advisors, UOB and DBS. Shareholders who have already accepted the prior offer will automatically be entitled to the revised price. The offer closing date has been extended to February 3, 2025. As of January 8, 2025, the Offeror acquired 20.79 million units (0.71% of issued units) via open market purchases, bringing the total controlled units to 966.42 million.

At a last traded price of \$1.19, Suntec REIT boasts a market capitalization of \$3.5 billion, trading at 0.6x price-to-book and offering a 5.2% dividend yield. Despite the revised offer price representing a deep discount to the REIT’s NAV of \$2.07 per share, analysts recommend shareholders to “HOLD” and await a final offer.

Frasers Logistics Trust

Frasers Logistics Trust remains one of the highest dividend yield performers among FSSTI-listed companies, with a forward yield of 7.73%. This positions it as an attractive investment for income-seeking investors amid volatile market conditions.

Mapletree Pan Asia Commercial Trust

Mapletree Pan Asia Commercial Trust offers a dividend yield of 6.69%. Temasek, through DBS, disposed of 1.5 million shares at a transaction price of \$1.21, reducing its stake to 56.98%.

Jardine Cycle & Carriage

Jardine Cycle & Carriage stands out with one of the lowest forward price-to-earnings ratios (P/E) at 5.73x. Its valuation makes it a compelling option for value-oriented investors.

Genting Singapore

Genting Singapore ranks among the companies with the lowest trailing EV/EBITDA ratios, standing at 5.10x. This metric underscores its relative valuation efficiency compared to peers.

Macroeconomic News

Bond markets globally are under pressure as inflation and fiscal deficits push yields toward key thresholds. US Treasury yields are approaching 5%, driven by robust economic data and sticky inflation. In the UK, yields hit 4.82%, the highest since 2008, while Japan’s government bond yields surpassed 1%, marking a decade-high.

Investors are cautious amid concerns about mounting government debt and uncertainty over President-elect Trump’s forthcoming policies. Analysts warn that these elevated yields could persist, with the US Treasury issuing \$119 billion in new debt this week. Despite strong demand at recent auctions, the market remains under strain.

Dividend Announcements

• FNN: 4 cents final dividend (Ex-Dividend Date: January 23, Payable Date: January 28).
• Frasers Property Ltd: 4.5 cents final dividend (Ex-Dividend Date: January 23, Payable Date: February 14).
• Thai Bev: THB 47 cents final dividend (Ex-Dividend Date: February 6, Payable Date: February 28).

Conclusion

Lim & Tan Securities’ January 9, 2025 report provides a comprehensive overview of market trends, dividend plays, and specific stock insights. While Suntec REIT emerges as a key highlight with its ongoing offer revisions, other companies like Frasers Logistics Trust and Genting Singapore offer compelling value propositions. Investors are advised to remain vigilant amid macroeconomic uncertainties and evolving market dynamics.