Singapore’s Budget 2024 has brought cheer to the market with an investment-focused approach that has buoyed market sentiment. Unlike the previous year’s budget, which was more focused on wealth re-distribution, this year’s budget is geared towards incentivizing investments in key sectors such as green transition, human capital, critical infrastructure, and high-quality foreign direct investment.
As Finance Minister Lawrence Wong presented the budget, the Straits Times Index (STI) remained in positive territory, reflecting the favorable market response to the measures outlined. Maybank Securities and RHB have identified 13 blue-chip stocks across six sectors that are expected to benefit from Budget 2024.
1. Financial institutions are poised to benefit from lower asset quality risks and enhanced support schemes for businesses and households. DBS, OCBC, and UOB are likely to see a positive impact on loan growth and revenue streams, supported by initiatives such as the Future Energy Fund and AI-related funding.
2. Property developers like UOL and CDL could benefit from a lower Additional Buyer’s Stamp Duty clawback rate, providing more flexibility in achieving full sales targets. Despite expectations of moderation in property prices, CDL remains a top pick due to its diverse land bank and limited inventory risks.
3. Real estate investment trusts (REITs) focused on suburban retail portfolios, such as CICT, are expected to benefit from cash handouts and income tax rebates that boost consumer spending. Industrial landlords like Clar and MIT, with a focus on high-tech spaces and data centers, could see long-term benefits from R&D-related tax rebates.
4. Industrial companies involved in energy transition and sustainable infrastructure development, such as Sembcorp, Keppel, and ST Engineering, stand to gain from the Future Energy Fund and tax credits. ST Engineering, with strong capabilities in cybersecurity, is well-positioned to benefit from the government’s commitment to defense and cybersecurity.
5. Telecom players like Singtel could benefit from enhanced support for R&D and AI development, as well as a nationwide broadband upgrade. The increase in broadband speed is expected to drive the development of AI-driven solutions, positioning telcos like Singtel as tech leaders in the region.
6. Technology companies, including Venture Corporation, stand to gain from higher tax rebates for R&D activities conducted in Singapore. The AI boom is expected to drive partnerships and customer growth for these companies, further solidifying their position in the market.
With a focus on investment and growth-oriented policies, Singapore’s Budget 2024 has set the stage for these blue-chip stocks to benefit across various sectors, contributing to overall market optimism and positive sentiment.
