AUD

The AUD is at a 5 ½ year low versus the SGD, at $1.0475 this morning, following the Reserve Bank of Australia’s unexpected move yesterday to cut interest rates to 2.25% from 2.5%. The surprise move came shortly after the central bank guided at the end of 2014 that it would keep its rates stable. Analysts highlighted that the central bank’s latest statement signalled that Australia wants to see an even weaker AUD, and could carry out further rate cuts if the AUD does not drop. The closely related NZD also took a beating versus global currencies, registering a 1.8% drop versus the USD, following the annoucement. Just two weeks back, Market Insight drew reference to BlackRock’s guidance, where the world’s largest asset manager, cautioned that the AUD/USD cross could fall by another 15% to US$0.70, weighed by the slump in resource prices, while cautioning of further interest rate cuts ahead. Given the precarious outlook of the AUD, SGX-listed companies that have a significant exposure to the AUD, either in terms of revenue or asset base, may be adversely impacted by the anticipated depreciation in the currency. Companies with revenue from Australia include SingTel, ComfortDelgro, SIA, AusGroup and Sinwa, while notable property developers and REITs with Australian exposure include Frasers Commercial Trust, Keppel REIT, Frasers Centrepoint, Ascendas Hospitality Trust, CDL Hospitality Trust and Stamford Land and UOL.