Budget 2025 Seen as Benefiting Banks, Retail, Green Energy, AI

Measures Could Underpin Local Stock Market, and Lift Economy: Analysts

- Angela Tan

The Budget unveiled on Feb 18 could boost spending and corporate lending and attract investments in green energy and artificial intelligence that could underpin the local stock market, analysts said.

They added that the range of cash handouts, vouchers and enhanced wage support should bolster local purchasing power and, in turn, lift other segments of the economy, such as the retail sector.

"We believe the household and business supports should keep economic activities strong, while investment into innovation and boosting the equities market would open up new opportunities for growth," JP Morgan strategists said.

The American bank upgraded Singapore stocks to "overweight" on Feb 19, citing the Government's market support, high dividend yields and fiscal room to cushion the impact of a global slowdown.

The benchmark Straits Times Index (STI) closed at 3,934.04 on Feb 19, up 8.48 points or 0.22 per cent.

One of the Budget-friendly measures included a 50 per cent corporate income tax rebate, capped at $40,000.

Tax incentives will also be introduced to encourage Singapore-based companies and fund managers to list here and strengthen the appeal of Singapore Exchange.

If these incentives are generous, they may help the stock market, said Mr Vasu Menon, managing director of investment strategy at OCBC.

A $1 billion Private Credit Growth Fund was also unveiled to provide more financing options for high-growth local enterprises.

Singapore's banks - DBS, OCBC and UOB - could see more business activity and an improvement in asset quality following the new measures, said RHB analyst Shekhar Jaiswal.

Top-ups of various infrastructure funds should boost bank loan growth, added Mr Krishna Guha, an analyst at Maybank Securities.