MARKET REVIEW
AND OUTLOOK
CONSISTENTLY DELIVERING STABLE
RETURNS DESPITE ECONOMIC UNCERTAINTY
Uncertainty over the US Federal Reserve’s
quantitative easing programme caused investors’
jitters for most of the first half of 2014. The latter
part of the year was followed by the downward
spiral of oil prices, further destabilising the market.
But despite the volatility, PLife REIT has delivered
consistent performance in line with the STI Index
for the past two years.
While the US economy is recovering, many
expect a bumpy year ahead with the heightening
of geopolitical concerns such as the rise of the
Islamic State, crisis in Europe that threatens the
social fabric and existence of the Euro zone and
global national elections in various countries which
will change the global political landscape. Closer
to home, investors continue to track the health of
Asia's economy.
On a macro scale, the ongoing standoff between
Russian and the West over Ukraine has heightened
the sense of risk in the global market as it triggers a
sense of cold war déjà vu. The imposed sanctions on
Russia have not only left Russia’s economy reeling
from plummeting oil prices but also inching towards
a currency crisis. The slowdown on the growth of
China’s economy is hampering economic growth
in the region and the instability has been posing a
threat to some Asian markets. While investors are
generally positive about the reforms that the newly
elected Prime Minister and President in India and
Indonesia promised their electorates respectively,
they are also wary about economic reforms being
delayed by deadlocks.
Global economic uncertainty, coupled with an
escalation of geopolitical tensions and rising
volatility of global currencies, means that investors
are more likely to remain cautious as they seek
to manage risks by investing in stable, resilient
stocks and shore up their portfolios with defensive
plays to ensure unwavering returns. Given its solid
fundamentals with a tactical growth strategy, PLife
REIT will continue to appeal to investors as it delivers
attractive and stable returns.
RIDING ON THE UNPRECEDENTED GROWTH
OF THE HEALTHCARE INDUSTRY
The healthcare industry has witnessed an
unprecedented growth in 2014 and the total global
healthcare spending is projected to rise 5.3 percent
annually over the next few years
[1]
. In particular, Asia’s
healthcare expenditure is expected to double or grow
three times faster than the global average
[2]
. The
combination of growing ageing population, rising
prevalence of chronic diseases and the soaring
demand for quality healthcare in the region holds
immense opportunities in the healthcare sphere.
This will draw a proliferation of healthcare providers
and services, suppliers of biopharmaceutical
and medical products, as well as an increased
emphasis in healthcare as governments beef up
their budget in healthcare spending and investment
in medical research, development as well as senior
living facilities.
With strong governmental support and growing
private sector interest in the healthcare assets, this
industry is poised to undergo a phenomenal growth
phase and PLife REIT is certainly well-positioned to
ride on the back of this growing industry. As one of
the largest listed healthcare REITs in Asia with robust
fundamentals, PLife REIT is able to leverage on its
strong network to establish strategic partnerships
with new healthcare operators in new markets
across the Asia Pacific region.
[1]
Deloitte. Retrieved from 2014 Global health care outlook:
/
Documents/Life-Sciences-Health-Care/dttl-lshc-2014-global-
health-care-sector-report.pdf
[2]
Collier, M. (2013, September 19). Asia: Healthcare's Biggest
M&A Opportunity and Challenge . Retrieved from Forbes:
-
healthcares-biggest-ma-opportunity-and-challenge/
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PA R K WAY L I F E R E I T
