Singapore Reits fall over 2% in Monday morning trading

REUTERS - Singapore shares trended lower after two sessions of straight gains, led by drops in real estate investment trusts (Reits), as upbeat United States jobs data reinforced expectations of tapering stimulus and interest rate increase in the US in coming months.

The REIT sector, which soared nearly 37 per cent in 2012 as investors sought high-yield stocks, fell over 2 per cent on Monday and nearly 6 per cent year to date.

This led Singapore's benchmark Straits Times Index to lose 0.6 per cent to 3,151.92 points, taking a lesser hit than MSCI's Asia-Pacific ex-Japan index, which dropped 1.5 per cent.

"We see less to cheer about for the developed Asia-Pacific EAFE (Europe, Australia, and Far East) constituents," Nomura analysts wrote in a research note.

Nomura gave preference to Singapore over the rest of Asia-Pacific ex-Japan developed markets, for its relatively flexible currency regime and more trade-intensive composition of the equity market.

But they also warned that Singapore's overheated property market could pose challenges to policymakers.

"Singapore strikes us as the best of an uninspiring lot - although Singapore, too, bears the overhang of a frothy property market that may challenge policymakers' footwork should capital outflows persist and monetary conditions be forced to tighten," they said.