Ask Me Anything: Answers To Your Questions on S-REITs, Renewable Energy and Global Markets

November 16, 2023

Welcome to our latest Ask Me Anything (AMA) session, where we dive into pressing questions from investors like you!

In this edition, we will explore the dynamics of Singapore’s REITs market, the impact of global trends on renewable energy ventures by Keppel Corporation Limited (SGX: BN4) and Sembcorp Industries Ltd (SGX: U96), the steps to start trading US stocks via the Prosperus platform, and which sectors might lead as we approach 2024.

Get ready for a deep dive into these intriguing topics, armed with insights to help you make informed investment decisions. Let’s get started!

Question: When Will Singapore REITs Prices Stabilize?

Singapore’s Real Estate Investment Trusts (REITs) have been riding a bit of a financial rollercoaster lately, mainly due to global economic jitters. Rising interest rates and inflation are like those steep climbs and drops, squeezing margins and making investors a bit queasy. Despite this, some S-REITs are picking up speed, thanks to tourism’s comeback.

The big twist? The US’s recent Consumer Price Index (CPI) data. It’s like that moment when the rollercoaster slows down, giving us hope that interest rates might stabilize or even dip, making S-REITs more appealing. With the yield at a fairly attractive level, I believe it is good for investors to take a long-term approach. Focus on the steady dividends and the potential of compounding wealth over time.

Question: There was a selloff in renewable/clean energy related stocks in the US mainly due to high interest rates resulting in high finance costs making renewable not a cost effective option. In Europe, Siemens Energy involved in renewables recently reported a huge loss and asked their government for financial help. How is this going to impact what Keppel and Sembcorp is doing in their pursuit of renewable energy?

The renewable energy sector is not the only industry that was affected by the higher interest rates. In general, businesses globally have been hurt by higher financing costs following the sharp increase in US Fed rate over the last one to two years. We are still in the midst of transition into renewable energy and there is still huge room for growth in the industry. Recent reports of significant losses by Siemens Energy had more to do with the fault in thousands of its wind turbines, resulting in heavy losses and the need to seek for bailout from the government.

So, what does this mean for Singapore’s Keppel Corp and Sembcorp Industries, who are diving deep into renewable energy?

Here is the scoop: Despite global financial challenges, Sembcorp Industries and Keppel Corp (KEP) are holding their ground. Sembcorp’s aiming high with a goal to hit 25GW in renewable energy capacity by 2028, up from 8.7GW, focusing on a diverse mix of wind, solar, and energy storage. They are spreading their wings across India, Singapore, Vietnam, Indonesia, the UK, and the Middle East, and plan to invest a whopping S$14 billion in the next few years.

Keppel, not to be outdone, is making waves by contributing to Singapore’s low-carbon electricity goals. They’ve already imported over 260GWh of renewable energy and are looking to bring in more from Cambodia and Indonesia. They’re still figuring out the nuts and bolts of economics and investment, but their ‘asset-light’ strategy could be a game-changer.

Question: I am an SG Stock Investor using Prosperus Trading platform. I am considering investing in US stocks using the same platform. Could you please let me know what are the steps taken to start trading on US markets?

Before trading US stocks, you need to fill out the W-8BEN Form. It’s a must-do and takes about 1-2 days to process. This form tells the U.S. tax folks that you are not a US resident and own the account. After your form is approved, activate your US Market Data Level 1 subscription. It’s free for now! But remember, your account needs funding first. Just head to “Settings,” then “Subscription,”.

Once you are done with that, you could go to your watchlist to track some of the US stocks that you are interested. For more information, you can go to: Get Started – ProsperUs or call our Customer Service.

Question: Which sectors are the most likely to outperform going into 2024?

As we approach 2024, certain sectors may outperform others. Technology, healthcare, and green energy are potential candidates, given their long-term growth prospects and ongoing innovation. Singapore REITs are also in a good position to recover as seen by the resilient earnings over the last one year despite the rising interest rates. However, these predictions are subject to change based on global economic developments, technological advancements, and regulatory changes.

Question: Genting Singapore’s financial results are pretty good, why the share price still very weak?

Genting Singapore Limited (SGX: G13) has reported strong financial results, but its share price remains subdued. This could be due to concern on the recovery in the tourism industry given the lacklustre recovery in China. Genting Singapore however has recently announced strong earnings which exceed expectations. This could drive share price higher going forward. Aside from that, the Group’s shift towards high-end market segment also bodes well for its growth prospect. Downside risks include a potential global recession, which could hurt the tourism industry.

Disclaimer: ProsperUs Head of Content & Investment Lead Billy Toh doesn’t own shares of any companies mentioned.

Billy Toh

Billy is deeply committed to making investment accessible and understandable to everyone, a principle that drives his engagement with the capital markets and his long-term investment strategies. He is currently the Head of Content & Investment Lead for Prosperus and a SGX Academy Trainer. His extensive experience spans roles as an economist at RHB Investment Bank, focusing on the Thailand and Philippines markets, and as a financial journalist at The Edge Malaysia. Additionally, his background includes valuable time spent in an asset management firm. Outside of finance, Billy enjoys meaningful conversations over coffee, keeps fit as a fitness enthusiast, and has a keen interest in technology.

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