Singapore Stocks Brace for Tariff Impact: Analyst Insights

CGS International | April 4, 2025

Singapore’s economy faces headwinds as the US announces reciprocal tariffs, with a 10% baseline tariff on all countries and higher levies on key trading partners like China, Malaysia, and Vietnam. In this comprehensive analysis, CGS International examines the potential impact on Singapore’s stocks across various sectors.

Defensive Names Recommended Amid Uncertainty

While Singapore’s exports to the US may be subject to a 10% tariff, the negative spillover effects are likely to be felt across the region. CGS International advises investors to adopt a near-term risk-off strategy, favoring large-cap defensive names such as:
ST
CLAR
KDCREIT
STE
Stocks with direct exposure to tariff-affected markets, like SATS and YZJSB, may experience choppy sentiment. Companies with over 10% exposure to Vietnam, Malaysia, or Thailand, such as KEP, FPL, THBEV, and RSTON, could also be impacted.

Tech Manufacturers Navigate Tariff Challenges

For tech manufacturing stocks under CGS International’s coverage, the impact is two-fold:
Trade tariffs and the prospect of a global trade war could lead to a recession, reducing industrial and consumer demand.
Many tech companies have adopted a “China+1” strategy, but now face tariffs in alternative production hubs like Malaysia and Vietnam.
The analysts surveyed the tech companies, who are still assessing the potential impact and exploring options like absorbing the tariffs within the supply chain or passing them on to customers. Venture Corp (VMS) and Frencken (FRKN) remain the top picks in the sector.

Shipbuilding Sentiment Remains Choppy

Concerns remain about the proposed US actions under Section 301 of the Trade Act of 1974 related to China’s dominance in the maritime, logistics, and shipbuilding sectors. While newbuild orders have declined, CGS International maintains an “Add” rating on Yangzijiang Shipbuilding (YZJSB) due to its margin expansion and profitability visibility from order book execution.

Exposure to China, Vietnam, Thailand, and Malaysia

CGS International has analyzed the exposure of Singapore-listed companies to the affected countries. Key findings:
DBS, OCBC, UOB, and GRAB have significant exposure to the Southeast Asian region.
ST, STE, and KDCREIT have limited direct exposure to the impacted markets.
Stocks like KEP, FPL, THBEV, and RSTON have over 10% exposure to Vietnam, Malaysia, or Thailand.
The report provides detailed breakdowns of asset, revenue, and profit contributions for these companies across the different markets.

Conclusion

With the US-led tariff actions potentially dampening global, regional, and Singapore’s economic growth, CGS International recommends a cautious, risk-off approach in the near term. Investors should focus on defensive, large-cap names while closely monitoring the developments around trade tensions and their impact on Singapore’s diverse corporate landscape.