2 Singapore Stocks that Benefit from the Government’s S$1.5 billion Support Package
October 19, 2022
In Singapore, the local government has announced a raft of measures to help Singaporeans to cope with the persistent global inflation that’s hitting households everywhere.
Deputy Finance Minister and Minister for Finance, Lawrence Wong, announced a S$1.5 billion Support Package to provide targeted and immediate relief for lower-income households and more vulnerable groups.
This package will also extend more help to local Singapore companies and in aiding to boost workforce transformation.
This builds on the support measures announced in Budget 2022 and April 2022, and the package will be funded from the better-than-expected fiscal outturn in FY2021 without any further withdrawal from past reserves.
Below is the summary of the S$1.5 billion Support Package.
Source: Singapore’s MoF, ProsperUs
So, what are the potential implications for investors? I believe these two Singapore companies will benefit from this latest S$1.5 billion Support Package.
1. Sheng Siong Group
Sheng Siong Group Ltd (SGX: OV8) is one of the largest supermarket chains in Singapore and operates a total of 66 outlets on the island.
With the additional cash given out by the government, I believe that this will benefit Sheng Siong as more people will use that money to shop for necessities and groceries in its outlets.
Sheng Siong’s position as a value-for-money supermarket chain will attract more consumers given the inflationary pressure we’re currently seeing.
As more people opt for more economical options, such as having more home-cooked meals, Sheng Siong will more likely be able to raise prices to pass on the costs while preserving its margins.
With the reopening of international borders and the resumption of air travel, SIA has seen a sharp resurgence in the number of passengers it carries.
I believe that the extra cash received in December will encourage Singapore families to make travel plans to other ASEAN countries during the holidays.
Given the strong Singapore Dollar, when compared to the region’s other currencies, the additional cash from the S$1.5 billion Support Package will encourage travel – especially with SIA’s budget airline, Scoot.
The expected increase in the number of travellers will support SIA’s recovery after a two-year hiatus from travel amid the pandemic.
Singapore’s government continues to remain supportive of business
Aside from the two companies, there are others that could also benefit from the support measures announced by the Singapore government.
For example, ComfortDelGro Corporation Ltd (SGX: C52) will also benefit from the cash vouchers given to ride on public transport.
The government’s support measures for businesses and workers will also attract investment.
This could benefit other industries and keep business momentum going despite the near-term challenges.
Billy is passionate about the capital market and believes in investing for the long haul. Prior to this, he was an economist at RHB Investment Bank, covering Thailand and Philippines market. He also worked as a financial journalist at The Edge Malaysia and has experience working with an asset management firm. Aside from the capital market, Billy loves a good conversation over a cup of coffee, is a fitness enthusiast and a tech geek.