Reits

Reits: Maybank KE expects the current "QE -inflated growth" to run out of steam in the months ahead and S-Reit prices will continue to rationalize. The house believes fears of the impending stimulus withdrawal and rate hikes overhang will cap further upside. Downgrades the sector to Underweight, and recommends switch to developers (prefer CapitaLand, Keppel Land, CMA, Wing Tai). Reiterates that in the current economic climate, S-Reits trading will get more volatile. If SG risk free rate rises to 2.25%, downside risk to Reits could be 10% from current levels, most severe for Office Reits (-11%), followed by Industrial (-5%) and then retail (-2%).