Property stocks brace for capital outflows on back of weak SGD

Investors are shying away from SGD-denominated assets.

The depreciating Singapore dollar is likely to result in capital outflows for SGX-listed property stocks, a report by UOB Kay Hian revealed.

The report stated that the weak SGD reduces investors’ appeal for Singapore dollar-denominated assets, including Property and REITs.

However, the effect of a strong USD is mitigated by currency hedges and asset liability matching strategies adopted by the companies.

“While the increased purchasing power of the US travellers could benefit the hotel and retail segments, they account for a small segment (around 3%) of visitors to Singapore,” the report noted.
 

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