Winners of Singapore budget 2024: banks, tech, renewables

Players in consumer staples and manufacturing cheer as well.  

Analysts at Maybank see financial, technology and consumer staple sectors as some of the industries winning big from the support measures and tax reliefs unveiled in this year’s budget.

Maybank economists Chua Hak Bin and Brian Lee Shun Rong the $1.9b boost to the Assurance Package, which includes vouchers, cash payouts and rebates, could help ease the high cost of living for Singaporean households and defray inflationary pressures that may result in lower asset quality risks for banks.

The 50% corporate income tax rebate could also ease financing risks and help boost lending especially for lending giants DBS, OCBC and UOB. The $2b top-up to the Financial Sector Development Fund as well as the state’s additional funding for AI are seen supporting not just the lending institutions, but also the Singapore Exchange, they said.

The cash handouts and income tax rebates, meanwhile, bode well for firms in the consumer segment like supermarket operators and suburban retail landlords. The analysts see defensive operators like Kimly and Sheng Siong gaining the most from higher consumer spending.

In line with the city-state’s net zero ambitions, Maybank noted companies in the renewables space stand to benefit from the new $5b Future Energy Fund, which aims to spur green investments.

“Budget 2024 has an ‘investment til’ – geared towards incentivizing investments in green transition, human capital, critical infrastructure and high quality FDI (foreign direct investment),” the economists wrote in a 17 February note.

Dubbed the Refundable Investment Credit, they said the investment tax credit with refundable cash features should support the high-value initiatives of companies from research and development to the expansion of manufacturing capacity. They picked tech firms ST Engineering and Venture as among the top beneficiaries of such schemes.

In the property market, they expect the lower ABSD clawback rate to have a “marginal positive” impact on the sales volumes of real estate developers like UOL and CDL. 

“The near-term relief measures for firms are relatively modest, providing less help to smaller and less profitable companies. These firms will continue to face pressure from the slew of increases in their wage bills, rental, utilities,” the analysts stated.

“That said, the longer-term schemes will help improve productivity and raise social inclusivity, boosting long-term growth," they added.