Liberation day came on 2 April, and it has been almost a month since. The Straits Time Index has yet to recover to its previous height but that does not mean that all Singapore stocks are behaving similarly. There are a couple of them that have rallied since then.
Singapore has always been known for its high-yielding, defensive assets. The defensive sectors like industrials and utilities will begin to attract attention if uncertainty persists. There has also been an increasing pivot away from banks as their shrinking net interest margins remains a concern especially when the economy tightens. We will uncover 8 stocks that continued to move higher and understand why they exhibit such momentum despite ongoing macroeconomic challenges.
Singtel (SGX:Z74)
Singapore Telecommunications Limited (Singtel) is one of Asia’s leading communications technology groups, providing a broad portfolio of services including mobile, broadband, cloud, cybersecurity, and digital solutions. Singtel’s essential service and broad investments across the regions pays off as good diversification. Singtel operates a regional and diversified business model, with core revenue streams from mobile services, ICT (Information & Communications Technology) solutions, and regional associates (e.g., Bharti Airtel, AIS, Globe). It earns from both consumers and enterprises and is expanding further into digital businesses and data centers to drive future growth.
Singtel anticipates its dividend to be 16.5 cents in 2025, the highest in the past 5 years. Furthermore, its cash flow remains strong, and capex was stable for FY24. Investor confidence remains strong heading into May’25. This is a show of strength by management; however, we would also like to note that we may not see its dividends growing much more for the coming years unless there is an uptick in earnings and growing cash flow.
ST Engineering (SGX:S63)
Singapore Technologies Engineering Ltd (ST Engineering) is a technology, defense, and engineering group specialising in aerospace, smart city solutions, defense, and public security systems. It has a presence in many countries like the Philippines, the United States, the United Kingdom, Botswana, New Zealand and many more.
ST Engineering runs a multi-sector business model with revenue streams across commercial and defense segments. The company is owned by Singapore sovereign wealth fund Temasek. ST Engineering adopted a unified corporate branding strategy, consolidating its key business units – ST Aerospace, ST Electronics, ST Kinetics, ST Marine – under a single brand. ST Aerospace is the world’s largest company dealing with third-party independent aviation maintenance, repair and overhaul services. The rest also deals with various value adding services for electronic systems, defense and shipbuilding. These wide range of services generates revenue generally from long-term government contracts and increasing international commercial projects.
For 1Q25, ST Engineering secured $4.4 billion worth of new contracts, with more than half from the defense & public security segments. This ensures sustained demand and a strong pipeline through the year, providing cushion against any disruptions from the trade war. The business has also improved cash flow in FY24 and achieved a positive net change in cash and cash equivalents. It will also be paying out SGD0.05 dividends. If this momentum continues, its dividend yield will be higher than the past few years.
SGX (SGX:S68)
Singapore Exchange Limited (SGX) operates Singapore’s stock exchange, offering listing, trading, clearing, settlement, and depository services across equities, fixed income, derivatives etc. It earns revenue from trading and clearing fees, listing fees, market data sales, and various financial services.
In 2025, there will be efforts to increase trading activities in the Singapore stock exchange. The S$5 billion equity market development programme will allow MAS and fund managers to invest in various Singapore stocks, boosting liquidity and demand. Other benefits like tax incentives, better Global Investor Programme etc. will benefit Singapore’s market, attracting more funds and businesses here. Lastly, with earnings growth, its cash flow also increased year on year for 1H25. It will also be paying out 9 cents of interim quarterly dividends, 0.5 cents higher year on year. This resilience has led to growing investor confidence in Singapore market and the exchange.
HK Land (SGX:H78)
Hongkong Land Holdings Limited is a major property investment, management, and development group with a focus on prime commercial real estate in Hong Kong, Singapore, and other Asian cities. HK Land operates a property investment model, generating steady rental income from high-end office and retail properties. It also engages in property development for sale but relies primarily on recurring income from its investment property portfolio.
It has recently announced its sale of One Exchange Square to Hong Kong Stock Exchange’s operator for HK$ 6.3 billion while launching a share buyback. Based on The Straits Time, the transaction is likely to be earnings accretive, and the proceeds will go to reducing debt and financing costs, which are good for the business. In addition, the business will also be engaging in capital recycling activities to enhance shareholder returns.
Its portfolio real estates are located in the central regions of these places such as Marina Bay Financial Centre. These are high quality assets with strong growth potential. In addition, cash flow remains stable amidst restructurings. It will also have an annual dividend of SGD 0.3 and a yield of about 5%.
Sheng Siong (SGX:OV8)
Sheng Siong Group Ltd is a supermarket operator in Singapore, offering a wide range of fresh produce, chilled, and general merchandise at competitive prices, often targeting heartland residential areas. Revenue is driven by direct retail sales, with an emphasis on operational efficiency, private label products, and expansion of new stores in suburban neighbourhoods.
Sheng Siong reported strong growth in 1Q25 with net profit rising 6% to $38.5 million. While this growth is due to an increase in new stores and festive season, its service is essential and deeply embedded in the heart of Singapore neighbourhoods. We believe that with the support of CDC vouchers, consumer demand will remain resilient. As of FY24, operating cash flow remains stable amidst its purchase of Jelita property. The acquisition should improve earnings as it increases the presence of Sheng Siong in neighbourhoods while increasing revenue streams. Furthermore, it will also be paying out SGD0.064 dividend with a yield of 3.64% in 2025.
ComfortDelGro (SGX:C52)
ComfortDelGro Corporation Limited is one of the world’s largest land transport companies, operating buses, taxis, rail, and private hire vehicles mainly in Singapore, Australia, and the UK. ComfortDelGro runs an asset-intensive, fare-collection model across various transport modes. It earns through government contracts, fare revenue, and vehicle rental fees, with a push into new mobility solutions and overseas markets to diversify income.
This year, ComfortDelGro will distribute a dividend of SGD0.0425 on 14th May, bringing their dividend yield to 5%. Its 2H24 earnings have also garnered strong growth due to increased contributions in the UK. Its consolidation of the taxi services and ability to collect higher fees through its taxi apps are beneficial for the business. These are also signs of moat and business resilience in price setting and customer retention. Furthermore, its cash flow improved with a positive net change in cash and cash equivalents in FY24. It will be paying dividends of SGD 0.0425 with a yield of 5% which is higher than last year. This would be more attractive to investors.
Capitaland Integrated Commercial Trust (SGX:C38U)
CapitaLand Integrated Commercial Trust (CICT) is Singapore’s largest commercial REIT, owning a diversified portfolio of prime retail and office properties primarily in Singapore and some assets in Germany and Australia. The REIT generates stable income by leasing commercial spaces. It distributes much of its income to unitholders and actively manages and rejuvenates its portfolio to enhance property values and rental yields. Its occupancy ratio remains healthy in 1Q25 at 96.4%.
CICT earnings remained stable, with good rent reversion. However, we believe that its business will be more of a defensive asset rather than achieving growth in the current environment, especially when consumer strength will likely remain muted. The use of cash from recycling activities will be important in providing hints towards future growth direction and opportunities.
The REIT will be paying out SGD 0.11 in distributions, about 5% yield in 2025. It also has a stronger distributable income than last year, with DPU increasing by 1.2%. This is critical and suggests resilience of its portfolio despite the business being in the midst of restructuring and capital recycling.
Netlink Trust (SGX:CJLU)
NetLink NBN Trust owns and operates Singapore’s nationwide fiber network infrastructure, providing fiber connections to residential, non-residential, and non-building address points. It runs a utility-like, regulated infrastructure model. It earns predictable revenue by charging access fees to retail service providers (like Singtel, StarHub, M1) who deliver broadband services to end users.
Its income is largely inflation-resistant and protected by regulatory frameworks. It has a high dividend payout of about 6%, with stable operating cash flow, providing a sufficient buffer for investors. Furthermore, its protection from regulatory frameworks and provision of essential service will remain relevant in times of economic downturn.
Cash flow and dividend yields are king
The stocks mentioned above resonate better as “safe haven assets” amidst the uncertainty of tariffs. These businesses are mature in their respective industries where the high growth days are long gone. We would see them more as a dividend play rather than for the purpose of asset price appreciation. This is the reason why we focused more on stable cash flow and dividend payouts. Furthermore, their increase in stock price for the past month is a testament of investor confidence amidst uncertainties. These businesses generally have stable operations entering 2025. Furthermore, many of them are cash rich and their ability to deploy cash in uncertainty is an advantage.
The appeal of these businesses is their predictable cash flows and rather prudent balance sheet management. This would be an important indicator to watch when investing in times of uncertainty. In addition, as rates remain elevated, these strong cash flows act as strong buffers for working capital needs and even capex spendings. Of these few companies mentioned, CICT is likely the most sensitive to high interest rates as they would need leverage to expand operations. Lastly, their ability to maintain their dividend yields will also be constructive in an environment of possible future rate cuts. This will make them better bond proxy candidates, increasing their appeal.
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