The 2026 Fiscal Budget increases stock market liquidity and the listing ecosystem, promoting artificial intelligence (AI) in key industries. At the same time, tightening labor and foreign employee policies, along with changes in transportation and environmental costs, have put new cost pressures on certain industries.
<h3>Winning Camp: Which Sectors Have the Upper Hand?</h3>
1) Stock Market Liquidity and Financing Environment: Positive for Finance
The Monetary Authority of Singapore has expanded the Securities Market Development Plan (EQDP) from SGD 5 billion to SGD 6.5 billion, and increased investments in Anchor Funds to attract listings and capital. Analysts believe this will enhance local stock market liquidity, improve fundamental valuations, and promote listing and refinancing activities.
Thilan Wickramasinghe, head of research at Malayan Banking, believes that the Singapore Exchange (SGX) and digital wealth management company iFAST Corp will benefit.
In addition, the government's strengthened support for corporate financing can reduce asset quality risks, driving increases in brokerage business, investment banking, and advisory fees. The rising demand for corporate and personal credit will also benefit local banks DBS, OCBC Bank, and UOB.
2) Artificial Intelligence and R&amp;D: Positive for Technology Manufacturing, Industry, Healthcare, and Digital Infrastructure
AI tax credits and industrial upgrades are expected to boost capital expenditures and equipment demand for chips. Thilan believes that AEM Holdings (AEM) and Frencken Group will benefit
Technology manufacturing stocks such as UMS Integration may benefit.
The AI park, research and development, and high value-added industry orientation may increase demand for business parks, data centers, logistics, and industrial spaces, which is favorable for industrial real estate investment trusts such as CapitaLand Ascendas REIT, Keppel DC REIT, as well as office building REITs like CapitaLand Integrated Commercial Trust (CICT), and Keppel REIT.
<img src="https://imageproxy.pbkrs.com/https://dss0.zbstatic5.com/s3fs-public/articles/2026/02/13/Image202520Science20Park20Drive.jpg/query-MTAyNA?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" alt="" original-src="https://imageproxy.pbkrs.com/https://dss0.zbstatic5.com/s3fs-public/articles/2026/02/13/Image202520Science20Park20Drive.jpg/query-MTAyNA"/>
The image shows the asset of CapitaLand Ascendas REIT located at 5 Science Park Drive. (Provided by CapitaLand Ascendas REIT)
Dylan is also optimistic about healthcare operators such as Raffles Medical, Thomson Medical Group, and Q&amp;M Dental Group, as these operators increasingly integrate AI into their operations, which can offset some pressure on profit margins, especially from employee costs.
3) Increased defense spending: favorable for industrial stocks
Defense and security spending is rising, with emphasis on areas such as unmanned systems, benefiting ST Engineering and Addvalue Technologies.
4) Real estate policy &#34;not tightened&#34;
<h4>Extended Reading</h4>
Prime Minister: Actively delve into key industries such as advanced semiconductor packaging and quantum technology

 Prime Minister Huang: Carbon tax in 2030 may be set at a lower level of 50 to 80 yuan per ton


The budget did not introduce new measures to cool the real estate market or wealth taxes, and analysts believe this is positive for developers and the real estate sector.
Jayden Vantarakis, head of ASEAN equity research at Macquarie Capital, pointed out that contrary to market expectations, this budget did not mention the real estate sector. He expects the residential market to remain robust given the lower mortgage rates. However, he also noted that the government typically does not announce significant real estate measures in the budget, with the only exception being the increase in buyer's stamp duty in February 2023.
5) Essential consumer goods still supported by shopping vouchers
Although household subsidies have decreased compared to last year, there are still measures such as the 500 yuan Community Development Council (CDC Vouchers) to support community consumption and supermarket foot traffic
Dylan is optimistic about Sheng Siong continuing to benefit.
6) Sustainable development benefits the solar energy business
Jaden said that most of the costs of the carbon tax are passed on to end customers, so the main positive effect comes from higher solar power generation targets. He believes that Sembcorp Industries will benefit from this, although the contribution to profits is expected to be limited. Sembcorp Industries currently has a solar installed capacity of 484 megawatts in Singapore, contributing about 1% to net profits.
<h3>Losers and Pressured Sectors: Which sectors face headwinds?</h3>
1) Aviation-related: Sustainable fuels bring cost pressure
The budget proposal promotes the use of sustainable fuels in aviation, which are more expensive and may put pressure on Singapore Airlines' (SIA) profit margins.
<img src="https://imageproxy.pbkrs.com/https://dss0.zbstatic5.com/s3fs-public/articles/2026/02/13/IMG9198a.jpg/query-MTAyNA?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" alt="" original-src="https://imageproxy.pbkrs.com/https://dss0.zbstatic5.com/s3fs-public/articles/2026/02/13/IMG9198a.jpg/query-MTAyNA"/>
The budget proposal promotes the use of sustainable fuels in aviation, which are more expensive and may put pressure on Singapore Airlines' (SIA) profit margins. (Photo by Wang Yanyan)
2) Labor-intensive industries: Stricter foreign worker thresholds and fee increases raise costs
Tighter foreign worker policies, including increases in local qualifying salary, employment pass, and S pass thresholds, as well as adjustments to certain work pass fees, may increase labor cost pressures for businesses. Jaden mentioned that industrial companies such as Seatrium, Fugen Group, and UMS Integration may be affected, but some costs may also be passed on to customers.
3) Transportation: Positive for electrification trends, but short-term capital expenditures are heavier

The budget proposal lowers the &#34;kill car&#34; PARF rebate and cap, which is expected to reduce the recoverable value of vehicles and increase the capital expenditure intensity for early fleet replacement, potentially bringing short-term financial pressure to ComfortDelGro, but the long-term policy impact is positive. (The Straits Times)
The direction of electric vehicles and charging infrastructure is a long-term benefit for land transport operators, but the budget proposal's reduction of the Preferential Additional Registration Fee (PARF) &#34;kill car&#34; rebate and cap is expected to reduce the recoverable value of vehicles and increase the capital expenditure intensity for early fleet replacement, potentially bringing short-term financial pressure to ComfortDelGro, but the long-term policy impact is positive

The 2026 fiscal budget will enhance stock market liquidity and the listing ecosystem, promote the development of artificial intelligence (AI), while facing tightening labor policies and cost pressures. Winners include the Singapore Exchange (SGX) and iFAST Corp, as the securities market development plan expands to SGD 6.5 billion, improving stock market liquidity and financing environment. Government support for corporate financing will reduce asset quality risks, benefiting local banks such as DBS, OCBC Bank, and UOB

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A look at the budget's impact on the stock sector: Capital markets and AI "increased investment" - Who are the winners and who is under pressure? | Lianhe Zaobao