Why analysts think that the SREITs are 'falling off a cliff'

10Y SGS yields hit 2-year high.

According to UOB Kayhian, 10-year Singapore Government Securities (10Y SGS) yields doubled in over a month, from 1.4% in early-May 13 to a two-year high of 2.8% on 24 June, before dipping back down to 2.6% on 1 July.

The sharp appreciation has brought SGS yields to its long-term average yield of 2.6% and is only slightly off the average 2.7% level between 2005-2007 before the great
recession and monetary easing by the Federal Reserve (Fed).

Here's more from UOB Kayhian:

The correction followed Ben Bernanke’s comments that if the Fed forecasts hold, the Fed will consider scaling back QE3 bond purchases later in 2013, and to end bond purchases by mid-14.

However, the reaction in the bond markets was swift and sharp, with investors globally exiting from fixed income investments. This was further compounded as investors fled emerging markets to the relative safety of the US, as growth in the US looks to accelerate while momentum slows in diverse economies from China to India and Brazil.

Although Fed officials have been keen to stress that the central bank may prolong bond purchases if the US economic recovery is weaker than anticipated, the longer-term trend is tilted towards a normalisation from a low interest rate environment.