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Banks, consumer firms, telcos, REITs to benefit from Budget, but corporate tax drags on MNCs: Bloomberg Intelligence

Nicole Lim
Nicole Lim • 5 min read
Banks, consumer firms, telcos, REITs to benefit from Budget, but corporate tax drags on MNCs: Bloomberg Intelligence
Analyst Catherine Lim names DFI, Sheng Siong, Jardine Cycle & Carriage, Keppel DC REIT, Suntec REIT as those who may benefit from this budget. Photo: Bloomberg
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More financial support for initiatives in green energy and artificial intelligence (AI) could benefit DFI Retail, Jardine Cycle & Carriage C07 -

and Singtel, and an extension of tax incentives may benefit DBS, HSBC, Deutsche Bank and peers, says Bloomberg Intelligence analyst Catherine Lim in her note on 18 Feb. 

Lim’s note follows the announcement of the Budget 2024 delivered by deputy prime minister Lawrence Wong on Feb 16. She adds that the higher handouts and support, and measures to reduce the impact of job loss could support retail sales and lift turnover rents for mall owners such as CapitaLand Integrated Commercial Trust C38U -


On taxes, Lim says that with the implementation of the OECD’s Pillar Two 15% minimum effective tax rate (ETR) for large multinationals (MNEs) from next year, this could negatively impact companies with substantial overseas income and hasten the relocation of more firms. 

“Still, its corporate tax rate of 17% will remain the lowest among Asia-Pacific nations, except Hong Kong, and be attractive to global corporations,” she says. For example, Thailand's corporate tax rate is 20%, Indonesia's is 22% and mainland China's is 25%.

The budget’s 50% rebate on corporate tax income, capped at $40,000 may also provide “little benefit” to big companies like Thai Beverage Y92 -

(ThaiBev), as the rebate is only a drop in the ocean compared to their net income of hundreds of millions, says Lim. 

However, as the world moves towards net zero, the budget 2024’s green energy initiatives will benefit more sectors, according to the Bloomberg analyst. 

See also: Singtel's higher dividends keep analysts positive, target prices increase

Consumer firms like DFI, Sheng Siong, Jardine Cycle & Carriage, ThaiBev and ComfortDelGro C52 -

can benefit from the energy efficiency grant, which will give financial aid to adopt energy efficient equipment like air-conditioners, water heaters, lighting, among others.

This support has been extended to include more sectors, such as manufacturing, construction, maritime and data centers, as well as their users.

Meanwhile, to promote the nation as an AI hub, Lim thinks that Singtel and Starhub can ride off the $1 billion investment announced. 

See also: Broker's Digest: Centurion, Food Empire, Frencken, Netlink NBN Trust, Thai Beverage, Singapore Airlines

“Telcos are looking to data centers for new income, as they counter slowing earnings from their connectivity businesses,” says Lim. “Demand for data centers is booming amid 5G network growth and the rising use of bandwidth hungry applications such as AI, IoT and cloud computing. Singapore's move can help it compete with neighboring countries which offer more land and cheaper electricity, both key for data centers' expansion.”

The analyst adds that REITs focused on data centers such as Keppel DC REIT, data-centre and business park owners including CapitaLand Ascendas REIT A17U -

(CLAR) and Mapletree Industrial Trust ME8U - (MINT) are poised to gain. 

Office landlords such as Keppel REIT, Suntec REIT and CICT, may see higher occupancy and rents as firms in the tech sector expand in Singapore, she notes. 

Likewise, banks could see a pickup in business activity after an extension of family-office tax breaks were announced. Lim says this could boost their wealth management fee income, as the government’s five-year extension to the end of 2029 of tax incentives used to establish family-office structures gives more certainty to the ultra-high-net-worth. 

The analyst notes that although potentially-higher hurdles, including a bigger minimum fund size, could slow growth after a surge in recent years, they could attract wealthier families, noting that DBS's wealth fees, representing 37% of fee income, jumped 35% in 2023. 

On that note, the government’s aid to small businesses and households could result in more deal activity for banks. 

Finally, the government’s $1.9 billion in handouts through an "assurance package" and the topping-up of the GST Voucher Fund by $6 billion could support retail sales, says Lim.  

For more stories about where money flows, click here for Capital Section

This is likely to result in higher turnover rents for retail mall landlords, including CICT, Frasers Centrepoint Trust J69U -

(FCT), Suntec REIT and Mapletree Pan Asia Commercial Trust N2IU - (MPACT). About 5% - 10% of the revenue from their retail mall business consists of turnover rents.

Lim notes the limited impact of the budget on housing measures. She says the cut in property tax for owner-occupiers due to an adjustment to the annual value bands is unlikely to affect home-purchase decisions as it is meant only to reduce residents' tax burden.

“The extension of the Additional Buyer's Stamp Duty (ABSD) concession to single Singaporeans aged 55 and older when they downsize their homes may lift demand for and prices of smaller homes slightly,” she says. 

Meanwhile, Lim believes that more budget allocated to upskilling the workforce above the age of 40, which she estimates make up at least 20% of the country's citizens, suggests heightened risk that the number of layoffs will stay above pre-pandemic levels.

Persistent layoffs throughout the global tech industry may keep the proportion of information and communications-related job cuts to total retrenchments in Singapore above pre-pandemic levels. 

The ratio rose to 19% in the first nine months of 2023 versus 9% in the same period four years earlier, she notes.

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