Opportunities in various sectors highlighted in the 2024 Singapore Budget

Presenting a robust strategy designed to bolster economic resilience, sustainability, and innovation, the Singapore Budget 2024 identifies key sectors poised for growth, offering lucrative opportunities for market participants to capitalise on emerging trends and market shifts.

This forward-thinking approach aims to foster a dynamic and adaptive economic landscape, ensuring long-term success and competitiveness.

Green Energy Development and Infrastructure

A Future Energy Fund with an initial injection of $5 billion – aimed at investing in clean energy technology and infrastructure – may benefit companies engaged in renewable energy generation/importation, green technology manufacturing and sustainable urban development.

Transitioning towards importing low-carbon energy will help Singapore in its pivot from using natural gas (which produces the least amount of carbon emissions) to achieving net zero emissions by 2050.

This would call for investments in infrastructure such as submarine cables and the upgrading of existing power grids. Another area would be hydrogen generation, storage and delivery, which would also require new infrastructure.

Examples of companies within this sector:

o   Sembcorp Industries Ltd (SGX: U96) – a leading energy, water, and urban development group poised to benefit from government support for renewable energy generation and sustainable infrastructure projects.

o   Keppel Corporation Limited (SGX: BN4) – a diversified conglomerate with interests in offshore and marine, property, and infrastructure, well-positioned for sustainable infrastructure development and green technology manufacturing.

o   Mitsubishi Corp (TYO: 8058) – Japan’s second largest company, which is involved in helping Singapore develop ways to harness hydrogen as an eco-friendly energy solution under the Memorandum of Understanding (MoU).

Technology Manufacturing & Data Centres

Given the importance of AI as a vital emerging technology, more than S$1 billion will be invested in AI computing and industry development. This initiative ensures Singapore's access to advanced chips, which are essential for AI development and deployment; and could benefit local chip manufacturing firms.

Enhancements to the national broadband network are essential to facilitate technology accessibility, which may be advantageous for data centres and offices as well.

Examples of companies within this sector:

o   AEM Holdings Ltd (SGX: AWX) - a leading provider of semiconductor test solutions, crucial for ensuring the reliability of integrated circuits powering AI devices.

o   Venture Corporation Ltd (SGX: V03) - global technology services provider supporting AI innovation through manufacturing essential components for AI-enabled systems

o   Keppel DC REIT (SGX: AJBU) – a real estate investment trust focused on data center properties across Asia-Pacific and Europe, which caters to the growing demand for data storage and processing services

Healthcare

A new S$7.5 billion healthcare fund which includes bonus payments and other measures to support retirement savings and healthcare costs could allow families to allocate more resources towards healthcare services and treatments.

The broader Majulah Package – encompassing initiatives such as MediSave top-ups and bonus payments – could bolster overall healthcare expenditure in Singapore, thus benefiting healthcare companies.

Increased Medisave bonuses for Singaporeans aged 21 to 50 and individuals born in 1973 or earlier, enhances healthcare affordability – potentially leading to higher healthcare utilisation rates.

Examples of companies within this sector:

o   Raffles Medical Group (SGX: BSL) – an integrated healthcare provider in Singapore that offers a comprehensive range of medical services, including specialist consultations, diagnostic imaging and preventive healthcare.

o   IHH Healthcare Bhd (SGX: QOF) – one of the largest healthcare providers in Asia, which operates hospitals and healthcare facilities across multiple countries.

o   Parkway Life REIT (SGX: C2PU) – focused on healthcare assets such as nursing homes, healthcare facilities and medical centres.

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