Are We Heading Back to Ultra-Low Interest
Many of us in Singapore watch in dismay as interest rates from T-bills, fixed deposits and high-yield bank accounts plummet to new lows in recent months. Three months Sora now stands at 1.29%.
With such low rates, there is little incentive for investors to stay in cash. Hence, it partly explains why the stock market in Singapore is nothing short of resilient.
Properties, the usual beneficiary of low interest, is also on a tear with buyers snapping up homes in several new launches during the month. The interest rate-sensitive REITs sector is also climbing steadily.
The Singapore economy is in such a buoyant mood despite increasing unemployment and record closures in the food & beverages business. The construction and build sector is leading the charge as Changi Airport Terminal 5, integrated resorts extension and multiple infrastructure projects kick off a multi year boom.
Further the Straits Times Index reached record high likely due to multiple expansion as the government mandates foriegn funds to invest in the local market. Another factor driving the market is the anticipation of government led $5b intiative to also invest in local small and mid cap.
SRS Fund Up 6 Month in a Row
The SRS fund is up 6 months in a row, bringing year-to-date gain to a whopping 22.5% versus the STI’s 16.5% return before dividends. This reflects broad-based gain, especially in the small and mid-cap segment. The rebound in REITs also contributed to this excellent result.
Portfolio Segments
The SRS Fund heavy focus on finance and property reflects the concentration in the Singapore market. I believe these 2 segment will continue to drive the portfolio growth into the future.
Dividends
Only $105 worth of dividends was collected during October. However, with earnings seasons on the way, I expect total dividends for Q4 should comfortably exceed last year’s Q4 total.
SRS Fund Value
Total SRS Fund value hit another record high at $576,121.14. Hence, the $600k mark is now in sight and is a very real possibility, given the $15.3k contributions at year-end still to come.
Cash Levels
Cash level remains at a record low of 0.7% as the SRS Fund takes full advantage of having time in the market.
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