CLSA looks deeper into yield-focused strategies in lieu of changing macro conditions. With Fed Chair, Janet Yellen’s recent comments about a gradual easing and the house’s forecast of the next rate hike to occur in 2H16, it feels that investors should look to dividend plays.
It notes that the Singapore dollar has appreciated recently with yields of the 10 year government bond falling to 2.07% from 2.6% which in turn has caused the yield gap between bonds and dividend plays to widen to a 3 year high of 2.4%, well above the average of 1.18%.
While declining earnings present risks, healthy balance sheets and expanding payout ratios should help to support dividends.
It makes no changes to its dividend cocktail which is made up of Ascendas REIT, Dairy Farm, Mapletree Logistics Trust, Mapletree Commercial Trust, Mapletree Greater China Commercial Trust, SingPost, Singtel, and ST Engineering.
In addition, the house notes that more companies have passed its bond proxy criteria with Ascendas REIT, Capitaland Commercial Trust, Ascott Reit and Cambridge Industrial Trust amongst notable mentions.
Subscribe to:
Post Comments (Atom)
No comments:
Post a Comment