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?
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?