REITs

REITs: Barclays notes that markets concerns about the end of QE3 or the Fed 'tapering' with long-dated government bond yields spiking up has resulted in both high-yield credit and high-yield equities, in particular S-REITs, being sold off. The house believes the concern is premature and do not expect the Fed to cut back its bond purchases until 2014 vs the market's expectation of 2H13. With that in mind, Barclays continues to believe that S-REITs' valuations are not expensive - still above normalised average yield spread with the office sector having bottomed. It prefers REITs that could grow faster even when interest rates gradually move up due to sustainable growth in the U.S. Barclays would accumulate on dips, noting that Keppel REIT and CapitaCommercial Trust, both rated OVERWEIGHT with respective TP of $1.70 and $1.87, are its top picks among S-REITs.