Singapore’s Bumper Budget: Here are the big winners and stocks to watch

Key points:

• Singapore election-year budget is pro-growth, pro-innovation and pro-spending, offering plenty of opportunities for long-term investors in key strategic sectors.
• Business-friendly policies, tax rebates and household support measures are likely to drive lending growth, property demand and increased consumer spending.
• Major investments in semiconductors and AI signal long-term opportunities in advanced manufacturing, automation, and digital infrastructure.
• Investors should, however, remain cautious of external risks and global economic uncertainty. Short-term consumer spending boosts could fade quickly, while regional trade headwinds could impact key sectors like semiconductors.

The latest budget delivers a mix of support measures, business incentives, and strategic investments in AI, semiconductors, nuclear energy, and infrastructure, creating opportunities for long-term investors. Here’s what stands out for buy-and-hold investors:

AI & Semiconductor Growth: Future-Proof Investments

• With S$1 billion for semiconductor R&D and S$150 million for AI adoption, Singapore is reinforcing its position as a technology hub.
• These initiatives could drive demand for data centers, chip manufacturing, and automation technologies.

Relevant Stocks:

• Venture Corporation Limited (SGX: V03) – Leading tech manufacturer that could be poised for gains from increased R&D.
• UMS Holdings Limited (SGX: 558) – Semiconductor specialist benefiting from industry expansion.
• Keppel DC REIT (SGX: AJBU) – Singapore’s largest data center REIT, positioned for AI-driven growth.

Banks & REITs: Lending Growth and Business Support

• With business-friendly tax rebates and incentives, corporate lending and real estate investments are expected to grow.
• Increased household support and wage schemes should also strengthen property markets and drive retail spending.

Relevant Stocks:

• DBS Group Holdings Ltd (SGX: D05) – Singapore’s largest bank, benefiting from increased lending and consumer spending.
• United Overseas Bank (UOB) (SGX: U11) – A major lender well-positioned to support business growth.
• CapitaLand Integrated Commercial Trust (SGX: C38U) – Singapore’s largest retail REIT, benefiting from increased consumer footfall.

Consumer & Retail: A Spending Boom Ahead

• S$800 in CDC vouchers per household and extra SG60 cash payouts is likely to boost consumer spending.
• Wage support and corporate incentives should also increase household confidence, lifting demand for everyday goods.

Relevant Stocks:

• Sheng Siong Group Ltd (SGX: OV8) – Supermarket chain likely to benefit from increased household spending.
• Thai Beverage Public Company Limited (SGX: Y92) – Consumer staple with exposure to discretionary spending growth.
• Wilmar International (SGX: F34) – Leading agribusiness with strong exposure to food and consumer demand.

Travel & Transport: Rising Demand from Economic Support

• As businesses and consumers receive financial support, higher disposable incomes and a recovering global travel industry make aviation and transport attractive.
• Ride-hailing and logistics services should also benefit from increased economic activity.

Relevant Stocks:

• Singapore Airlines (SGX: C6L) – National carrier poised for growth as travel demand rises.
• SATS Ltd (SGX: S58) – Major ground-handling and catering provider benefiting from air travel expansion.
• Grab Holdings (NASDAQ: GRAB) – Ride-hailing and delivery giant, set to gain from higher consumer spending and urban mobility.

Nuclear & Green Energy: Long-Term Growth Play

• Singapore’s exploration into nuclear power, including small modular reactors (SMRs), signals a long-term shift toward cleaner, more sustainable energy.
• S$5 billion allocated to the Future Energy Fund will support research, infrastructure, and innovation in clean energy.

Relevant Stocks & ETFs:

• Sembcorp Industries (SGX: U96) – Leading developer of renewable energy and infrastructure projects.
• Keppel Infrastructure Trust (SGX: A7RU) – Strong exposure to clean energy investments and utilities.
• VanEck Uranium+Nuclear Energy ETF (NYSEARCA: NLR) – ETF offering diversified nuclear energy exposure.

Key Risk: Global Headwinds & Policy Execution Challenges

While Singapore’s Budget 2025 is packed with growth initiatives and sector tailwinds, investors should remain cautious about global economic uncertainty, high interest rates, and execution risks in AI, green energy, and infrastructure investments. Short-term consumer spending boosts may fade, and regional trade headwinds could impact key industries like semiconductors and exports. A well-diversified portfolio remains essential to navigate both opportunities and uncertainties in the evolving market landscape.