GE2025: Ruling party's strong showing signals flight to safety and a vote for policy continuity, say analysts
[SINGAPORE] Analysts welcomed the results of Singapore's general election (GE) held over the weekend, calling them a vote for political stability and policy continuity for investors.
Citi said in a report on Monday (May 5) that the strong mandate won by the ruling People's Action Party (PAP) puts to rest any fears of a lurch towards populism and its attendant fiscal risks. It inspires confidence in policy continuity, which translates to better predictability and investor confidence in a pro-business approach, the bank added.
It also noted that historically, the Singapore dollar and PAP vote share have a negative correlation. But the impact this time could be the opposite if the vote points to Singapore's 'safe-haven' appeal. Any 'unwanted... appreciation pressures' would be partially offset by lower short-term interest rates, Citi said.
On the other hand, Singapore equities tend to have a positive correlation with the ruling party's vote share.
Ahead of the market session on Monday, OCBC's managing director of investment strategy Vasu Menon told The Business Times that the local bourse could 'enjoy decent gains' from the PAP's strong showing, Wall Street's rally last Friday, and upbeat US jobs data. The Singapore bourse kicked off the week higher, but gave up most of its gains by the afternoon.
In Saturday's GE, the PAP raised its overall share of votes to 65.57 per cent, up 4.33 percentage points from GE2020's 61.24 per cent. The Workers' Party (WP) kept its 10 existing seats in Hougang SMC and Aljunied and Sengkang GRCs, but failed to gain any ground in the other wards it contested. None of the other opposition parties won a seat.
BT in your inbox
Start and end each day with the latest news stories and analyses delivered straight to your inbox.
Sign Up
Sign Up
Regarding business-linked government moves, Citi believes the poll results are likely to cement continuity in current policies.
These include a continued inflow of foreign workers once the cyclical downturn has run its course, with the share of foreign workers continuing to rise even after the 'watershed elections in 2011'.
While social expenditures will continue to grow, the government will resist pressure to use more investment returns as revenue.
DBS senior economist Chua Han Teng shares a positive view of the election: 'PAP's strong mandate will reassure investors of ongoing political stability and policy continuity, that has potential to enhance the already favourable business environment that will serve Singapore well over the coming years.'
He expects the PAP government to balance between providing immediate economic support with long-term priorities of improving growth as well as addressing rising social needs.
These include more targeted fiscal support for businesses and workers, complementing monetary policy easing this January and April, Chua said.
'Measures will likely prioritise local small and medium-sized enterprises with lesser resources and greater constraints, and especially those engaged in goods exports business, which will be particularly vulnerable to the direct and indirect impacts of US tariffs,' Chua added.
Maybank analysts said: 'The margin of victory by the incumbents could reflect on the preference of both electorates for stability as the external environment becomes more challenging.'
OCBC's Menon added: 'A well-managed economy, run by a stable government, is often welcome news for investors, given the current uncertain global economic environment, and this should have at least some positive immediate benefits for the local bourse,'
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Business Times
4 days ago
- Business Times
China's tourism industry could hit one trillion yuan by 2026: Citi
[SINGAPORE] China's tourism sector will gain a boost as the country seeks to diversify from manufacturing to other services, said Citi in a note on Thursday (Jun 5). This could transform the country's tourism sector into a one trillion yuan (S$178.9 billion) industry by 2026, said the bank's China economists Yu Xiangrong, Hu Yuanliu and Ji Xinyu. Policymakers have introduced substantive measures to support inbound tourism from abroad in an effort to soften the blow from US tariffs on goods exports, said Citi. This includes waiving unilateral visa requirements for 30 days of travel for an additional nine countries in South America and the Middle East in May, bringing the number of countries with unilateral visa-free entries to 47 countries. In December 2024, the country's transit policy had also been extended to allow visa-exempted travellers to make stops of up to 10 days (240 hours), a duration previously set at 72 or 144 hours, depending on the traveller's citizenship. This change also expanded permitted stay locations by an additional 60 ports and 24 provinces, the note found. Tax rebates have become easier to obtain for tourists, with the minimum purchase threshold reduced from 500 yuan to 200 yuan in April. Considerable effort has also been undertaken by payment companies along with the country's central bank to improve convenience and operability for foreign tourists, the note said. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up Such measures were notable in returning inbound tourism to pre-pandemic levels. The country's Ministry of Commerce reported that foreign tourists spent US$94.2 billion in 2024, an increase of 77.8 per cent from the year before. This accounted for about 0.5 per cent of gross domestic product. Currently, travellers to China comprise largely of residents from Hong Kong, Macau and Taiwan, making up about 80 per cent of the 131.9 million inbound travellers in 2024, said Citi. But momentum from beyond the region is building, with visits by foreigners increasing 40.2 per cent in the first quarter of 2025 from the previous corresponding period. 'The policy efforts are paying off,' the Citi team wrote, explaining that China's brand as a travel destination has become increasingly attractive. 'More international tourists are seeking to experience a 'real China'.' Lower-tier cities and local destinations have benefited from this trend, beyond popular travel destinations such as Beijing and Shanghai, the bank said. 'For example, Zhangjiajie has been popular for Korean tourists.' The deflationary environment in China, coupled with a weak renminbi, could further boost tourist spending, Citi wrote. If demand continues into the rest of 2025, the bank forecast a 40 per cent rise in foreign tourism and a 10 per cent rise in travellers from Hong Kong, Macau and Taiwan. Macroeconomic boost Revenue from inbound tourists in 2025 could grow to 880 billion yuan, in a 30 per cent increase from the previous year, Citi projected. This would add 0.15 percentage point to the country's GDP growth, the bank said. Local labour markets stand to gain from increased travel, with official reports estimating that 1.6 times more jobs are created from services compared to goods exports of the same value. Citi projected that the 30 per cent travel export growth would create about 500,000 non-farm jobs, bringing headline unemployment down by about 0.1 percentage point. Yet, a tourism boost may not be sufficient to relieve the country's deflation struggles. 'China's deflation is mostly industrial-driven with quite an entrenched demand-supply imbalance,' the report said. Travellers to China made up about 0.5 per cent of total retail sales in 2024, the bank said, which would not be enough of a demand boost to move the needle.
Business Times
4 days ago
- Business Times
China's tourism industry could surpass one trillion yuan by 2026: Citi
[SINGAPORE] China's tourism sector will gain a boost as the country seeks to diversify from manufacturing to other services, said Citi in a note on Thursday (Jun 5). This could transform the country's tourism sector into a one trillion yuan (S$178.9 billion) industry by 2026, said the bank's China economists Yu Xiangrong, Hu Yuanliu and Ji Xinyu. Policymakers have introduced substantive measures to support inbound tourism from abroad in an effort to soften the blow from US tariffs on goods exports, said Citi. This includes waiving unilateral visa requirements for 30 days of travel for an additional nine countries in South America and the Middle East in May, bringing the number of countries with unilateral visa-free entries to 47 countries. In December 2024, the country's transit policy had also been extended to allow visa-exempted travellers to make stops of up to 10 days (240 hours), a duration previously set at 72 or 144 hours, depending on the traveller's citizenship. This change also expanded permitted stay locations by an additional 60 ports and 24 provinces, the note found. Tax rebates have become easier to obtain for tourists, with the minimum purchase threshold reduced from 500 yuan to 200 yuan in April. Considerable effort has also been undertaken by payment companies along with the country's central bank to improve convenience and operability for foreign tourists, the note said. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up Such measures were notable in returning inbound tourism to pre-pandemic levels. The country's Ministry of Commerce reported that foreign tourists spent US$94.2 billion in 2024, an increase of 77.8 per cent from the year before. This accounted for about 0.5 per cent of gross domestic product. Currently, travellers to China comprise largely of residents from Hong Kong, Macau and Taiwan, making up about 80 per cent of the 131.9 million inbound travellers in 2024, said Citi. But momentum from beyond the region is building, with visits by foreigners increasing 40.2 per cent in the first quarter of 2025 from the previous corresponding period. 'The policy efforts are paying off,' the Citi team wrote, explaining that China's brand as a travel destination has become increasingly attractive. 'More international tourists seeking to experience a 'real China'.' Lower-tier cities and local destinations have benefited from this trend, beyond popular travel destinations such as Beijing and Shanghai, the bank said. 'For example, Zhangjiajie has been popular for Korean tourists.' The deflationary environment in China, coupled with a weak renminbi, could further boost tourist spending, Citi wrote. If demand continues into the rest of 2025, the bank forecasted a 40 per cent rise in foreign tourism and a 10 per cent rise in travellers from Hong Kong, Macau and Taiwan. Macroeconomic boost Revenue from inbound tourists in 2025 could grow to 880 billion yuan (S$157.4 billion), in a 30 per cent increase from the previous year, Citi projected. This would add 0.15 percentage point to the country's GDP growth, the bank said. Local labour markets stand to gain from increased travel, with official reports estimating that 1.6 times more jobs are created from services compared to goods exports of the same value. Citi projected that the 30 per cent travel export growth would create about 500,000 non-farm jobs, bringing headline unemployment down by about 0.1 percentage point. Yet, a tourism boost may not be sufficient to relieve the country's deflation struggles. 'China's deflation is mostly industrial-driven with quite an entrenched demand-supply imbalance,' the report said. Travellers to China made up about 0.5 per cent of total retail sales in 2024, the bank said, which would not be enough of a demand boost to move the needle.
Straits Times
4 days ago
- Straits Times
Ownership through a ‘shared vision': Prof Faishal Ibrahim's hopes for the Malay/Muslim community
Associate Professor Faishal Ibrahim hopes to achieve what he described as a 'shared vision' for the Malay/Muslim community. PHOTO: BERITA HARIAN SINGAPORE - One of the ways in which Associate Professor Faishal Ibrahim tries to engage with young people is by being active on social media and personally replying to messages he receives on his social media accounts. 'They want to be heard. They would like to have an open conversation,' he said on June 4. Acknowledging that he is 'not young,' Prof Faishal said other ways he engages with younger people is by working with younger MPs, speaking to youth during his public engagements as well as creating more mentoring opportunities via Mendaki and other Malay/Muslim organisations. These are some ways in which the newly minted Acting Minister-in-charge of Muslim Affairs hopes to achieve what he described as a 'shared vision' for the Malay/Muslim community – one shaped in part by the community itself, so they feel a sense of ownership over it. Achieving such a vision would take some time, said the 56-year-old, adding that he would share updates at different milestones. Prof Faishal was speaking to reporters at the KopiCuts cafe and barbershop at community hub Wisma Geylang Serai – where he serves as lead adviser – in his first sit-down interview since taking being appointed to the role on May 21. He replaced Social and Family Development Minister Masagos Zulkifli, who had held the portfolio since 2018. Married with two children, Prof Faishal was previously an associate professor at the National University of Singapore's Department of Real Estate. He said he received a warm reception from residents following his recent appointment. 'It is very heartwarming to see the responses from our community where they say that they want to cooperate with me and my colleagues, to continue the effort to develop our community and our country,' he said. 'And more importantly, they feel that the Prime Minister listened to their concerns and aspirations regarding our community leadership.' He thanked his predecessors Mr Masagos and retired cabinet minister Dr Yaacob Ibrahim, who served as Minister-in-charge of Muslim Affairs from 2002 to 2018. Prof Faishal noted he had worked closely with both men, describing them as having had the heart to serve the community and help it progress. It was also by working with both men that he saw the challenges associated with the role, as well as what needs to be done, he said. 'I know this is not an easy responsibility, some have told me they know it's not easy but they want to support this effort,' he added. Prof Faishal joined politics in 2006 at the age of 38, as part of a six-member PAP team representing Marine Parade GRC. Following the 2011 elections, he became an MP for Nee Soon GRC, where he served for three terms. During the 2025 General Elections, he returned to the newly-formed Marine Parade-Braddell Heights GRC as part of a five-member PAP team, led by Speaker of Parliament Seah Kian Peng, which won the constituency uncontested. In 2012, Prof Faishal became Parliamentary Secretary at the health and transport ministries, and in 2017 was promoted to Senior Parliamentary Secretary in the education as well as social and family development ministries. He subsequently became Minister of State for National Development and Home Affairs in 2020, and following the 2025 GE was appointed Senior Minister of State for Home Affairs as well as Acting Minister-in-charge of Muslim Affairs. While the community has progressed tremendously over the years, making strides in areas such as post-secondary education, there are still areas for improvement, Prof Faishal said. These include working with government agencies to meet the needs of needy families as well as addressing the drug problem in the community. He also highlighted the need to have more Malay/Muslim children enrolled in pre-school education, saying that he would work with Mendaki chairman Zaqy Mohamad, who is also Senior Minister of State for Sustainability and the Environment, and Defence, to address the issue. Beyond the M3 framework, Prof Faishal said other Malay/Muslim organisations, as well as professional bodies and informal groups, can play a role in meeting the needs and aspirations of the community. M3 refers to a tie-up between self-help group Mendaki, the Islamic Religious Council of Singapore and the People's Association Malay Activity Executive Committees Council. He added that he would like to see more ground-up initiatives, citing the example of Bersamamu – a programme which provides Muslim couples with mentoring from their solemnisers in their first two years of marriage. He noted that Bersamamu was initiated by veteran religious teacher Ustaz Pasuni Maulun and other solemnisers, before it received the support of the Government. 'This is an example of how we can work together,' he said. When asked how he would address views which differed from the those of the authorities, Prof Faishal said the Government is 'well-intentioned' and tries to meet all needs. However, it has to take in account all viewpoints, he said, adding that some more complex issues may require more time to be addressed. 'There may be issues that are not easy but we know that the Government's intention is to help, to solve these issues together.' A long-time supporter of English football club Liverpool, Prof Faishal says the club's motto You'll Never Walk Alone – derived from Gerry and the Pacemaker's 1963 single of the same name – can be applied to Singapore's Malay/Muslim community. The community will never walk alone as it has the support of its leaders and community organisations, he said. 'And I will also never walk alone, because I have the Malay/Muslim community and the people of Singapore with me to continue this effort,' he said. Zhaki Abdullah is a correspondent at The Straits Times. He is on the health beat, in addition to occasionally covering science, environmental, tech and Muslim affairs issues. Join ST's WhatsApp Channel and get the latest news and must-reads.
