CIO Equity Tacticals: SG Equities: Brace & Buckle Up
What Happened On 7 Apr, Singapore's Parliament announced a new support package, worth nearly SGD1bn, to mitigate the economic impact of the Middle East conflict. This is in addition to the SGD155bn...
Chief Investment Office - Hong Kong8 Apr 2026
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What Happened

On 7 Apr, Singapore's Parliament announced a new support package, worth nearly SGD1bn, to mitigate the economic impact of the Middle East conflict. This is in addition to the SGD155bn allocated in Budget 2026, one of Singapore’s largest budgets on record. These measures address the recent surge in energy costs due to the Iran war. Key initiatives include cash handouts for eligible Singaporeans, the early release of SGD500 CDC Vouchers in Jun 2026 (originally slated for Jan 2027), an enhanced corporate tax rebate of 50% (up from 40%) for FY2026, and fuel vouchers for car-hire platform workers, private-hire car drivers, and taxi drivers.

What It Means

Singapore resilient but not spared from prolonged energy disruption

Despite its resilience, Singapore is not immune to prolonged global disruptions. The nation relies on imported natural gas for 95% of its electricity, with 9% of this year's supply expected from Qatar. As the world's third-largest oil trading hub and sixth-largest refinery export hub, Singapore has maintained its domestic supply and international commitments. Its role in international energy trade has ensured continued access to crude oil. While Singapore has not yet tapped into its natural gas and diesel reserves, it aims to increase them, even if at a higher cost.

Deputy Prime Minister Gan Kim Yong noted strong economic activity in the first quarter of 2026, though growth will likely be affected if the Middle East conflict persists. The trade ministry currently forecasts Singapore's growth at 2-4% for the year, with a projected fiscal surplus of SGD8.5bn for FY2026 (Apr-Mar).

Approximately 2.4mn Singaporeans will receive cash payouts of SGD400-600 in Sep 2026. These timely measures are designed to cushion the impact of energy disruptions from the Middle East, supporting domestic consumption. Furthermore, Singapore's fiscal strength and ongoing equity market reforms continue to provide tailwinds for Singapore equities.

How to Invest

The market outlook remains uncertain. A swift de-escalation of the conflict would reinforce a narrative of resilient growth and corporate earnings. However, a prolonged conflict risks a more fragile macro environment, prompting defensive investment strategies. While the recent two-week ceasefire between the US and Iran offers short-term relief, we maintain our preference for quality Singapore stocks with resilient dividends. In particular, companies with net cash and strong pricing power are well-positioned to navigate risks from inflationary pressures and interest rate hikes. Meanwhile, retailers with strong presence in suburban malls in Singapore stand to benefit from the cash handouts.


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