• FTSE ST Real Estate Investment Trusts (FTSE ST REIT Index) decreased from 853.35 to 816.11 (-4.37%) compared to the last monthly update. The Singapore REIT index broke the support level of 816 to a low of 799, but has since rebounded to 816.  
• Yield spread (in reference to the 10-year Singapore government bond of 1.78% as of 5 February 2021) remained almost the same, changing from 4.19% to 4.18%. As the interest rate hike approaches, and government bond yields increases, this would, in theory, tighten the yield spread (as the DPU from S-REITs are lagged). Some fund managers may be doing portfolio rebalancing to keep the yield spread criteria intact, which may have caused the recent price corrections across the S-REIT market, increasing S-REIT yields (ttm yields remaining stable with a drop in price leads to increased ttm% yield). Therefore, Yield Spreads remained largely the same due to both government bonds and S-REIT average yields increasing. 
• The risk premium remains attractive (compared to other asset classes) to accumulate Singapore REITs in stages to lock in the current price and to benefit from long-term yield after the recovery, especially since the S-REIT Market is undervalued. Moving forward, it is expected that DPU will continue to increase due to the recovery of the global economy, as seen in the previous few earning updates. NAV is expected to be adjusted upward due to revaluation of the portfolio. 
• Technically the FTSE ST REIT index has broken the critical 816 support and currently rebounded to test the 816 level. If the REIT index is able to go above this level, the bearish breakout will be negated as this is considered a false breakdown. Otherwise, the REIT index will continue the downtrend towards 800 and 775.

Technical analysis

FTSE ST Real Estate Investment Trusts (FTSE ST REIT Index) decreased from 853.35 to 816.11 (-4.37%) compared to the last month update. The Singapore REIT index broke the support level of 816 to a low of 799, but has since rebounded to 816. 

• Short-term direction: down. 
• Medium-term direction: down.
• Immediate Support at 800, followed by 775.
• Immediate Resistance at 816.

Due to the recent correction, Immediate Support is now 800 (partially a psychological support since 800 is a round number) and Immediate Resistance is now 816. In order to return to the range the Index was trading in for the past 18 months (between 816 and 890, the 2 thick red lines), the Index has to break above the Immediate Resistance of 816. This has happened back in November of 2020 (highlighted green). Failing to do so, the following support is at 775.