(Bloomberg) — Singapore’s budget measures to address the city-state’s high cost of living may benefit stocks tied to consumers, while the property sector and multinational companies may suffer as a result of higher taxes.

In his speech on Tuesday, Finance Minister Lawrence Wong said the government will increase handouts to citizens to help offset a higher goods and services tax and rising living costs. On the other hand, taxes were raised on higher-value property, multinational firms, and luxury cars. The benchmark Straits Times Index fell as much as 1.4% Wednesday after ending little changed after the budget speech.

“Addressing the cost of living is a major positive for local consumption as inflation is running high,” said Nirgunan Tiruchelvam, an analyst at Aletheia Capital Ltd. “The increase in handouts and the focus on creating job opportunities will aid stocks tied to consumers.” 

The S$104 billion ($78.4 billion) spending plan aims to push residents closer to a post-Covid reality while easing near-term cost-of-living pressures.

Here are details of what analysts see as the main winners and losers from the budget:


Consumer Stocks

Singapore’s plan to increase handouts to citizens by S$3 billion to S$9.6 billion to help offset higher price pressures in the fiscal year from April will be positive for stocks tied to local consumption.

Food and beverage maker Fraser and Neave Ltd., grocer Sheng Siong Group Ltd. and restaurant and food caterers such as Jumbo Group Ltd. and Kimly Ltd. could all benefit. Keppel REIT and other consumption-focused real estate investment trusts may also gain. 

Most consumption-linked stocks traded lower on Wednesday, while Kimly rose more than 1%.

Read: Singapore Boosts Cushion Against Rising Costs by $2.26 Billion

The budget measures could also “help vulnerable borrowers cope with rising inflation, offsetting potential threats to local banks’ risk profile,” Bloomberg Intelligence analysts Rena Kwok and Sheenu Gupta wrote in a note.

Aged Care

Singapore’s steps to increase resources for lower-income seniors can aid hospital operators such as Raffles Medical Group Ltd. and IHH Healthcare Bhd. Shares of both were marginally lower in early Singapore trading on Wednesday. 

The budget pledges to top up the ElderCare Fund by S$500 million and the MediFund by S$1.5 billion.


Finance Minister Wong’s plans to boost job opportunities for Singaporeans implies more business for staffing-solutions providers such as HRnetgroup Ltd. 

The city-state will top up a national productivity fund by S$4 billion, develop labor market intermediaries that can undergo industry training and employment facilitation and extend the Senior Employment Credit and the Part-time Re-employment Grant.

HRnetgroup’s shares extended gains after the budget announcement to close 2.4% higher on Tuesday. They gave up most of those gains in early Wednesday trading.



Singapore will raise taxes for higher-value properties in an attempt to boost revenue and help fund an array of spending programs.

Residential properties valued at more than of S$1.5 million and up to S$3 million will be taxed one percentage point higher at 5%. Properties in excess of S$3 million will be taxed two percentage points higher at 6%.

Singapore’s property bellwether City Developments Ltd. fell as much as 3.4% on Wednesday, the most since July 12. Peer UOL Group Ltd. dropped as much as 1.9%. 

“Developers such as UOL and CDL could see volume impact to higher-end units,” said Thilan Wickramasinghe, an analyst at Maybank Securities Pte. Still, grants for the resale of Housing and Development Board’s flats is supportive of overall prices and may enable a soft landing for private property, he added.

Impact of Singapore Housing Stamp Duty Hike to Be Limited: Bloomberg Intelligence


Singapore intends to set its effective tax rate for multinational enterprises at 15% starting 2025, in line with a global agreement to increase the floor rate. Some world-renowned multinationals with a presence in Singapore include Apple Inc., Sony Group Corp. and Amazon.com Inc.

Such a move may also weigh on a number of members of the Straits Times Index should they be designated as multinational corporations under local laws. 

Labor Cost

Singapore’s move to boost local workers’ long-term savings by raising the salary ceiling for Central Provident Fund (CPF) contributions may present cost headwinds for some companies’ long-term earnings, according to Citigroup Inc.

The salary ceiling for CPF contributions will be raised over the next four years, implying employers of local and resident labor will see an increase in their average wage costs given rules for mandatory employer contributions, analysts including Arthur Pineda wrote in a note dated Feb. 14.

“Singapore companies with the most significant labor cost exposure would be ST Engineering (~28% of revenues linked to labor), Sembcorp Marine (~20% of revenues), Nanofilm (~34%), OCBC (~28%), Singapore Airlines (~14%) and Sheng Siong (~14%),” they wrote.

–With assistance from Ishika Mookerjee.

(Updates to add section on labor costs in last three paragraphs; analyst comments on property in 18th paragraph, and share moves throughout.)

©2023 Bloomberg L.P.


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