Banks, property stocks could be losers from Singapore’s budget

Tuesday’s budget is set to focus on the pandemic-hit travel sector or firms with mandates in line with green or digital initiatives, say analysts. That’s bad news for the benchmark Straits Times Index, which has risen 2.9% so far this year.

SINGAPORE: Equity investors expecting a big boost for Singapore’s benchmark index from its upcoming annual budget could be disappointed: heavyweight blue chips are unlikely to benefit from government largess.

Aimed at reversing the nation’s worst economic contraction since it became independent in 1965, Tuesday’s budget is set to focus on the pandemic-hit travel sector or firms with mandates in line with green or digital initiatives, say analysts.

That’s bad news for the benchmark Straits Times Index, which has risen 2.9% so far this year. The gauge has significantly underperformed the broader MSCI Asia Pacific Index even though Singapore has managed to contain the spread of the virus.

“The upcoming budget is unlikely to be a game changer, ” said Kee Yan Yeo, analyst at DBS Group Holdings Ltd.

Government proposals will likely focus on struggling aviation and tourism sectors, or companies seeking to expand, digitize or invest in new technologies like 5G, rather than spurring growth in real estate and banks — which dominate the benchmark, Yeo said. – Bloomberg

The Star, 15 February 2021 (Monday)