Monday Wrap: SG confidence rebound, MAS surprise, C-suite tech gap

However, inflation is broadening beneath the sentiment recovery, and Singapore's GenAI readiness ranks last in Asia Pacific.

Last week in Singapore Business Review, consumer confidence staged its sharpest regional recovery since last year's trough, the Monetary Authority of Singapore surprised markets with a tighter-than-expected policy move, and C-suite executives revealed a widening gap between recognising technological change as a top threat and feeling prepared for it.

Singapore's consumer sentiment score jumped nine points to 56 in the UOB ASEAN Consumer Sentiment Index, the largest regional gain and a full reversal from September 2025, when it scored 47, the regional low. Positive perceptions of the current economy rose 16 percentage points to 66%, driven by AI-related trade and manufacturing activity, government cost-of-living transfers, and equity market wealth effects.

The MAS surprised at its July policy meeting, raising the S$NEER appreciation rate though only "very slightly", a qualifier RHB described as potentially without precedent in MAS history. The bank cited stronger growth and rising imported inflation; analysts had broadly expected a hold.

Analysts split on what follows: RHB expects the slope to reach 1.50% by year-end with risks towards 1.75%, whilst UOB expects a hold at 1.25% through 2026 and into 2027, unless energy costs force another 25 basis point move as early as October.

The inflation picture is less benign than June's headline suggested. Core CPI rose to 1.6% year-on-year from 1.4% in May, below consensus, but Nomura, UOB, and RHB read it as signalling broadening price pressures; the share of the CPI basket recording inflation above 2% jumped from 31.2% to 36.3% in a single month. A 17% electricity tariff rise and 7.1% gas tariff rise for Q3 are immediate pressure points, with RHB estimating the electricity increase alone could lift the utilities component by around 6.8% month-on-month in July. UOB flagged an 81% probability of a very strong El Niño from October, posing further upside risk to food prices; RHB forecast food inflation accelerating to 2.7% in H2 from 1.7% in H1.

Singapore employers reported actual wage increases of 3.9% in 2026, just below 4.0% in 2025, with WTW projecting a return to 4.0% in 2027. Budget compression told the real story: 54% of organisations finished exactly on plan, 26% came in under, and three-quarters are planning flat headcount over the next 12 months.

CGS International argued a potential StarHub-M1 merger would generate SGD70m in annual recurring synergies, with EPS accretion of 120% by year two and 250% by year three. The case rests on SIMBA's disadvantage: 10MHz of spectrum against rivals' 100MHz, an unresolved investigation into unauthorised spectrum usage, and potential negative free cash flow from one-off cybersecurity capex of SGD21m to SGD28m. CGS said either outcome for SIMBA supports ARPU recovery for incumbents from 2027.

Lastly, technological change ranked as the top external threat for 69% of C-suite executives surveyed by Russell Reynolds Associates, up from 48% in H2 2025, but only 46% said they were prepared. Singapore recorded the lowest GenAI technical-skills readiness across Asia Pacific at 20%. The cyber confidence figure cut the other way: 87% said they were prepared for cyber threats, a number that sits uneasily alongside Veeam research showing only 28% of ransomware victims recovered all their data.