Singapore Budget 2025 seen benefiting banks, retail, new energy, AI, underpinning SGX

Singapore Budget 2025: Boosting Growth adn Investment

Singapore’s 2025 Budget, unveiled on February 18th, has been met with optimism by analysts who believe it offers a comprehensive strategy for bolstering economic growth, encouraging corporate investment, and supporting households during a period of global uncertainty.

A Package of Fiscal Support

The budget includes a range of measures aimed at ensuring a robust economic climate. A key highlight is the 50% corporate income tax rebate, capped at $40,000, designed to alleviate the financial burden on businesses and stimulate investment.This, coupled with tax incentives to attract Singapore-based companies and fund managers to list on the Singapore Exchange (SGX), is expected to strengthen the appeal of the local stock market, according to OCBC’s managing director of investment strategy, Vasu Menon.

Targeted Support for High-Growth Businesses

The creation of a $1 billion Private Credit Growth Fund signifies the government’s commitment to fostering the development of high-growth local enterprises. This dedicated fund will provide access to vital financial resources, nurturing innovation and entrepreneurial ventures.

Benefits for the Financial Sector and consumers

Singapore’s banking sector is anticipated to see increased activity and improved asset quality following the budget’s announcements. Analysts at RHB predict higher loan growth fueled by top-ups to various infrastructure funds. Meanwhile, households will benefit from a comprehensive package of cash handouts and vouchers, designed to offset the cost of living and stimulate consumer spending.

Boosting Renewable Energy and tech Sectors

The budget also sets the stage for growth in the sustainable energy sector. With singapore’s ongoing assessment of hydrogen as a fuel source, companies like Sembcorp Industries and City energy stand to gain. Additionally, the government’s focus on attracting high-quality investments in technology and innovation is expected to benefit sectors like semiconductors and life sciences, with companies like Frencken Group and Venture Corporation poised for growth.

Investing in Infrastructure and Transportation

Meaningful investments in public transportation, including expanding the rail network and enhancing bus services, will benefit companies like SBS Transit.The government’s commitment to further developing Singapore as an air hub promises growth opportunities for Singapore Airlines, Sats, SIA Engineering and STE Engineering.

Real Estate Impact: no Cooling Measures, Focus on Supply

While there were no property cooling measures announced, the budget did emphasize increasing the supply of HDB flats. JP Morgan analysts believe this could benefit developers.

Conclusion

Singapore’s Budget 2025 lays the groundwork for a vibrant and resilient economy. By prioritizing investments in key sectors,supporting businesses and households,and fostering innovation,the government is confidently navigating global economic headwinds and setting the stage for sustained growth in the coming years.

What is Mrs. Lim’s overall assessment of Singapore’s Budget 2025?

Singapore Budget 2025: Navigating Uncertainty, Fostering Growth – An Interview with Mrs. Julia Lim,Economist at UOB kay Hian

hello,Mrs. Lim, thank you for joining us today. Let’s dive right in. What’s your overall take on Singapore’s Budget 2025?

The 2025 budget is a comprehensive and forward-looking fiscal package that’s designed to boost growth, encourage investment, and support households amidst global uncertainty.It’s notably noteworthy for its focus on transforming, or ‘3T’, strategies – tax, transparency, and trust. I commend the government’s effort to strike a balance between fiscal sustainability and social support.

One of the standout features of this budget is the 50% corporate income tax rebate.How do you think this will resonate with businesses?

This measure is indeed a significant boon for businesses. It’s a clear signal from the government that they’re committed to creating a competitive business environment. the rebate, capped at $40,000, will directly alleviate the financial burden on companies and stimulate investment, especially for SMEs, thereby boosting economic activity.

Speaking of business, the government has introduced several incentives to attract companies to list on the SGX. What impact do you anticipate on the local stock market?

The tax incentives are a strategic move to raise Singapore’s profile as a global listing hub. Vasu menon from OCBC expects this to strengthen the appeal of the SGX, perhaps driving up listings and increasing liquidity. However, the challenge lies in ensuring these listings are of high quality and contribute meaningfully to our market.

The $1 billion Private Credit growth Fund caught our eye. Do you think this will successfully nurture high-growth enterprises?

Absolutely. This fund is a vote of confidence in our local ecosystem’s ability to spawn innovative, high-growth startups. With access to vital financial resources, these enterprises can scale up and drive innovation across sectors. It’s a targeted approach to fostering entrepreneurship and economic resilience.

How do you see the budget’s provisions for the financial sector and consumers playing out?

For banks, we can expect increased activity and improved asset quality, thanks to anticipated higher loan growth. For consumers, the comprehensive package of cash handouts and vouchers is a welcome relief, providing immediate support and stimulating spending. But let’s hope these rewards aren’t just a short-term boost; we should be encouraging long-term savings habits too.

A thought-provoking question for our readers: While the budget addresses immediate needs, what more could be done to foster long-term financial literacy among Singaporeans?

unordered-list-item”>I believe financial education should start at a younger age, integrated into our school curriculum. Additionally, we could see more initiatives that encourage lifelong learning andanskills progress, aligning financial education with digitalization and the future economy.

Before we wrap up, what are your thoughts on the real estate market, especially since ther were no cooling measures introduced?

While no cooling measures were announced, the emphasis on increasing HDB flat supply is a positive step to keeping a lid on prices. Developers may stand to gain, but the government has made it clear that sustainable growth, not Speculative gains, is the priority. So, we can expect stability to prevail in the real estate market.