Overview of Singapore Budget 2025

Singapore’s 2025 Budget is a balanced response to both immediate and long-term challenges. It provides relief for citizens grappling with the high cost of living while focusing on enhancing Singapore’s global competitiveness and fostering sustainable growth. Key measures include cash handouts, tax rebates, and investments in clean energy, all of which have notable implications for various sectors and listed companies.

Sheng Siong Group (SSG) and DFI Retail (DFI): Riding the Wave of Higher Cash Handouts

Supermarket operators Sheng Siong and DFI Retail are poised to benefit significantly from the increased household spending fueled by the government’s generous cash handouts. Measures such as the S\$600-800 SG60 vouchers, S\$800 CDC vouchers, and S\$500 LifeSG credits for children under 12 are expected to drive sales volumes.

The SG60 vouchers, disbursed in July 2025, and CDC vouchers, distributed in May 2025 and January 2026, are partially earmarked for use at participating supermarkets. This ensures a direct inflow of spending into these businesses. Additionally, eligible households will receive up to S\$760 in U-save rebates to offset utility bills, further freeing up disposable income for retail expenditures.

Recommendation: Positive outlook for Sheng Siong and DFI Retail as higher cash handouts are likely to boost revenues substantially.

Retail REITs: Incremental Gains from Increased Consumer Spending

Retail REITs with supermarket tenants, such as Frasers Centrepoint Trust (FCT), CapitaLand Integrated Commercial Trust (CICT), Mapletree Pan Asia Commercial Trust (MPACT), and Lendlease Global Commercial REIT (LREIT), are expected to benefit indirectly from heightened consumer spending. While the impact on REITs will be less pronounced compared to the supermarket operators, the increased footfall and tenant sales are likely to contribute positively to occupancy rates and rental revenues.

Recommendation: Favorable prospects for retail REITs, albeit to a lesser extent than direct supermarket operators.

Singapore Exchange (SGX): A Boost from Tax Incentives

The government’s tax incentives aimed at bolstering the local equities market are a strategic win for SGX. Companies seeking a primary listing will enjoy a 20% corporate income tax rebate, while secondary listings are eligible for a 10% rebate. These rebates are capped at S\$6 million and S\$3 million per year for companies with market caps above and below S\$1 billion, respectively.

In addition, fund managers who invest at least 30% of their assets under management (AUM) in Singapore-listed equities will receive tax exemptions on qualifying income. These measures are anticipated to enhance net new money inflows, boost trading turnover, and improve liquidity, thereby elevating SGX’s regional and global appeal.

Recommendation: Optimistic outlook for SGX due to expected increases in trading activity and market interest.

ComfortDelGro (CD): Minimal Financial Impact from Electric Vehicle Road Tax

The introduction of an Additional Flat Component (AFC) of road tax for electric heavy goods vehicles and large buses is unlikely to significantly impact ComfortDelGro’s financials. The AFC will be phased in starting January 2026, reaching full implementation by January 2028. For electric large buses, the AFC is set at S\$550 annually, which translates to negligible incremental operating expenses for ComfortDelGro. Currently, only around 2% of its Singapore bus fleet is electric.

Recommendation: Neutral impact on ComfortDelGro, with minimal financial implications from the road tax changes.

Sembcorp Industries (SCI) and Keppel Corporation (KEP): Beneficiaries of Clean Energy Investments

Singapore’s commitment to clean energy is underscored by a S\$5 billion top-up to the Future Energy Fund, aimed at exploring alternative energy sources, including nuclear power. As operators of Singapore’s power generation companies (gencos), Sembcorp Industries and Keppel Corporation are well-positioned to participate in new infrastructure projects and investment opportunities arising from these initiatives.

The government’s push towards decarbonization also includes new schemes like the Heavy Vehicle Zero Emissions Scheme and grants for electric heavy chargers, further signaling a long-term commitment to sustainable energy solutions.

Recommendation: Positive long-term outlook for SCI and KEP, given their strategic role in Singapore’s clean energy transition.

Key Takeaways from Singapore Budget 2025

• Generous cash handouts and tax rebates are expected to drive consumer spending, benefiting supermarket operators and retail REITs.
• Tax incentives for equities and fund managers will likely boost SGX’s trading volumes, liquidity, and market attractiveness.
• Investments in clean energy and decarbonization initiatives open new opportunities for Sembcorp Industries and Keppel Corporation.
• The financial impact of new road tax measures on ComfortDelGro is negligible, given the low proportion of electric vehicles in its fleet.