Hot stocks: US office S-Reits rise on Federal Reserve’s rate cut
The Fed announces an unusually large half-percentage-point reduction
PURE-PLAY US office real estate investment trusts (Reits) listed in Singapore were trading in positive territory on Thursday (Sep 19) morning, following interest rate cut of 50 basis points by the US Federal Reserve.
Manulife US Reit (MUST) hit a high of US$0.135 shortly after the market opened, gaining 8.9 per cent or US$0.011. Prime US Reit also reached a high of US$0.21 as at 9.29 am, up 5 per cent or US$0.01.
Meanwhile, Keppel Pacific Oak US Reit (Kore) rose as much as 7.5 per cent or US$0.02 to US$0.285 in early trade.
By 10.38 am, units of MUST were trading up 5.7 per cent or US$0.007 at US$0.131, with 16.6 million units having changed hands.
Prime US Reit units were up 5 per cent or US$0.01 at US$0.21, with 4.9 million units having changed hands. Similarly, units of Kore were trading 5.7 per cent or US$0.015 higher at US$0.28, with 2.8 million units having changed hands.
No married deals were recorded for all three counters in early morning trade, according to ShareInvestor data.
On Wednesday, the US Federal Reserve announced an unusually large half-percentage-point reduction, a move aimed at boosting a cooling job market while continuing to push down on inflation.
Fed chair Jerome Powell said: “This decision reflects our growing confidence that with an appropriate recalibration of our policy stance, strength in the labour market can be maintained in a context of moderate growth and inflation moving sustainably down to 2 per cent.”
The Fed had kept its policy rate in the 5.25 to 5.5 per cent range since last July, when it ended an 18-month rate-hike campaign that was meant to control a surge in inflation, which soared in 2022 to a 40-year high.
