Effect of interest rates rise on preferred stocks

Thread Rating:
  • 0 Vote(s) - 0 Average
  • 1
  • 2
  • 3
  • 4
  • 5
#1
I read this article that talks about the effect of rising interest rate on preferred stocks in the US.
Link
Basically, preferred stocks dropped sharply when the 10-Year Treasury Note Yield rose from a low of 1.65% to a high of 2.78% last May. I can understand that, since preferred stocks behave similarly to bonds.
Likewise, REITs are sometimes described as having bond-like characteristics, and the rise in 10 year SGS yield last May caused all the S-REITS to drop significantly.
However, I am puzzled by how preferred stocks in Singapore seems unaffected by rise in interest rates.
For example, if we look at DBS Bk 4.7% NCPS, the drop in 2013 May is not that much more than other ex-dividend dates. (There is a bigger drop this March, but I think that is due to the fear of early redemption by DBS) Chart

Same for Hyflux 6% CPS. Chart

Am I missing something here?
Reply


Messages In This Thread
Effect of interest rates rise on preferred stocks - by gzbkel - 02-05-2014, 07:11 PM

Forum Jump:


Users browsing this thread: 1 Guest(s)