Strong fiscal strength gives SG edge amidst trade tensions: report

Projects like the Jurong-Southern Economic Zone are expected to strengthen Singapore’s appeal in global supply chain realignments.

Singapore’s strong fiscal health and strategic infrastructure investments may help the country emerge as a relative winner amidst escalating global trade tensions, according to a new strategy report by Maybank Research.

Analysts highlighted that Singapore has “dry powder to cushion the blow” and noted its safe haven status could be reinforced as global investors seek stability. Projects like the Johor-Singapore Special Economic Zone (JS-SEZ) are also expected to strengthen Singapore’s appeal in global supply chain realignments.

Whilst Singapore has not been spared from the latest round of US tariffs under President Donald Trump’s “Liberation Day” initiative, its exposure is lower than that of regional peers.

Despite facing a 10% reciprocal tariff, Maybank pointed out this is “significantly less bad than the region.” The analysts see the country’s strong fiscal position and targeted policy capacity as buffers that can mitigate the secondary effects of the global economic slowdown.

In the banking sector, Maybank anticipates some near-term stress due to slower credit demand and potential Federal Reserve rate cuts, which could compress margins. However, banks with regional exposure—particularly to North Asia—may benefit from any Chinese economic stimulus.

“We prefer banks with a larger domestic footprint and North Asia exposure which could benefit from Chinese stimulus,” the report stated.

Manufacturing, especially in technology exports, may also face demand headwinds, but Singapore-based operations are expected to fare better than others.

“The overall tariffs faced by the sector—which manufactures and exports predominantly from Singapore and Malaysia—is a lot lower than competitors. This may provide some cushioning,” analysts said.

Gaming is likely to see indirect pressure from softer inbound travel and lower VIP spending, particularly from China and Vietnam—two countries heavily impacted by US tariffs. Chinese VIPs, once accounting for half of Singapore’s VIP volume, have already declined to 20–30%, according to the report.

Maybank identified domestically focused sectors with steady demand—such as healthcare and transport—as more resilient. “Domestic operators in healthcare such as Raffles Medical, and transport such as ComfortDelGro, should be less impacted by export tariffs,” the analysts noted.

REITs with local exposure are also seen as beneficiaries if interest rates fall amidst rising global uncertainty. “A falling rate environment could be a boon to REITs, especially those with domestic exposure—CICT, FCT,” the report said. Telcos like Singtel are viewed favorably for their defensive earnings and low U.S. exposure.

Small- and mid-cap stocks tied to domestic growth themes—such as infrastructure and decarbonization—could gain further attention, especially with upcoming policy support.

“We think the upcoming $5bn MAS disbursement to revive the domestic equity market could be another key catalyst for the sector,” analysts said.

Maybank’s list of “Trump Tariff Winners” includes ST Engineering, Sembcorp Industries, Raffles Medical Group, ComfortDelGro, CapitaLand Integrated Commercial Trust, Frasers Centrepoint Trust, Singtel, CSE Global, ISOTeam, Sea Ltd, and Grab—firms expected to outperform in this evolving trade landscape.