DBS Group Research analysts Derek Tan, Rachel Tan and Dale Lai has called the additional $800 million pledged by the government on May 28 to aid firms and individuals as “timely”.

See: Govt to further distribute $800 mil to firms and individuals affected by tighter measures; no draw on past reserves


“This round of measures appears to be particularly targeted at individuals and also small- and medium-sized enterprises (SMEs) that are significantly impacted by the heightened measures and will be in need of cashflow support,” write the analysts in a May 31 report.

On this, the analysts see the government’s new rental relief scheme of half a month as offloading some of the burden from retail landlords and S-REITs who have announced that they will be supportive of their tenants previously.

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To the analysts, the government’s announcement was seen as a positive one as the government has deemed the spread of community cases as under control.

“Hopefully we will be able to return to some form of normalcy soon rather than being in the current ‘zombie’ situation (as some retailers have called this period),” write the analysts, who have noted that mall traffic have dipped “significantly” even though some crowds remain.

Landlords and tenants also seem to be better prepared during the latest round of heightened measures.

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“We believe the retail S-REITs are better prepared this time round, working with their retailers on a differentiated strategy of offering financial support (rental reliefs) but also getting the retailers onto e-commerce platforms (through in-house offerings),” write the analysts.

Among the retail S-REITs, the analysts from DBS have kept Frasers Centrepoint Trust (FCT) as their top pick due to its exposure to the more resilient essential tenant trades and its portfolio of suburban malls.

“We continue to believe that recovery will come once the situation is under control as what we had seen previously and any share price weakness will be an entry opportunity,” they write.

Units in FCT closed 6 cents higher or 2.5% up at $2.42 on June 1.