Liberation Day has hit all corners of the world, with PM Lawrence Wong mentioning that Singapore will take a “bigger hit” than others amidst the trade war. He also cautioned that we must brace ourselves for more shocks following the shift in world order. Staying cautious and nimble in such times is definitely warranted. The benefit of retail investors is our flexibility and our ability to swiftly move in and out of the market without much constraints.
In the modern world, Singapore has largely been a trading hub, so businesses operating in these areas may face pressure. Furthermore, our MNCs or blue chips listed in the market like Singtel, REITs operators etc have significant investments out of Singapore. The slowdown in other economies will definitely drag these businesses and market sentiment have shown. Today, 7 April 2025, also marked the largest intraday decline of Straits Time Index by 8.5%, at time of writing, since the subprime mortgage crisis in 2008. However, if we shift our lens and focus to domestically oriented and necessity-driven businesses, we could stay resilient in such times. We’ve been looking at 5 businesses that are potentially resilient in the current economic environment.
1. SBS Transit Ltd (SGX:S61)
Our daily commute, SBS Transit Ltd, is a necessity for most Singaporeans. SBS is a Singapore-based public transport operator providing bus and rail services. The company operates approximately over 200 bus services with a fleet of over 3,572 buses. Additionally, it manages around 78 stations across various lines, including the North East Line (NEL), Downtown Line (DTL), and the Sengkang-Punggol Light Rail Transit (SPLRT) systems.
SBS had been continuously revamping its transport infrastructure. We’ve seen multiple new generations of buses, new bus routes added to bring convenience to the Singaporeans over the past few years. Its MRT operations have also been of high standards. Personally, I’ve enjoyed taking DTL for commutes to and fro the city.
Recently, SBS reported 2H24 earnings with profits attributable to shareholders increasing by 6.8%, with full year earnings increasing by 1.8%. The company’s improving operating efficiency is critical for its sustained performance in the future. For the frequent commuters or 上班族, we all know how busy it is in the morning for the buses going into the city area and even the MRT lines are packed like sardines. Furthermore, with the high COE prices and uncertain economic environment, fewer people are going to buy cars, leading to them gravitating towards public transports. This is an essential service that will remain relevant in our daily lives. It’s current dividend yield is 8% in 1H25, much higher than prior years.
2. Sheng Siong Group Ltd (SGX:OV8)
Grocery shopping has been and will continue to be a part of our daily life. Integrated into the neighbourhoods of Singapore, Sheng Siong is not just a supermarket, it is where fruitful daily interactions take place. The familiar faces we meet every morning when we do our routine rounds in the market, sourcing for the freshest products, is many’s way of life. No matter how bad the economy is, we will still be at Sheng Siong buying food.
Established in 1985, Sheng Siong Group Ltd is one of Singapore’s leading supermarket chains. The company operates over 77 stores island-wide and 6 stores in China, offering a wide range of products including fresh produce, meat, seafood, and general merchandise. Furthermore, Sheng Siong’s 2024 earnings have been stable towards the upside.
While trade war may affect Sheng Siong’s earnings, government support will play a big part in cushioning the effects. The recent issuance of CDC vouchers, which are accepted at Sheng Siong, directly supports household spending. With Singapore leaning towards a loose monetary policy in Budget 2025, we do see strong possibility of further support to the economy in various forms when it is needed. Currently, Sheng Siong offers about 2% dividend yield, on track to end the year with about 3-4% dividend yield, consistent with its 5-year average.
3. NetLink NBN Trust
There’s only one nationwide fibre network supporting Singapore’s Nationwide Broadband Network and that is operated by NetLink NBN Trust. This allows us to access nationwide ultra-high -speed broadband access. It is also the fundamental infrastructure to allow other fibre network and telecommunication operators to offer their products and services, maintaining competitive prices to the public. The table below shows resilience and demand for its services across its business segments.
NetLink NBN Trust owns, designs, builds, and operates the passive fibre network infrastructure for Singapore’s Next Generation Nationwide Broadband Network (NBN). Its earnings had been largely stable, but the proliferation of the digital economy and the inevitable trend of IoT and AI emphasises the essentiality of its service. Continual government support and development in this area will be beneficial for the business and likely remain stable operations in the short term. It has not confirmed dividends for 2025, but it has been able to consistently pay out about 6% dividend yield for the past few years.
4. Parkway Life Real Estate Investment Trust (Parkway Life REIT)
Healthcare is a necessity in the modern world. No matter how tight our pockets are, if we are able to, we will find ways to fork out the bill if our loved ones are in trouble. While demand will definitely be subdued, love and care trumps any market turmoil.
I would like to draw parallel to a couple of US health insurers that actually maintained value for the past few days despite the larger market drop. This shows how the society that we live in views healthcare as a whole. This is a psychology that is ingrained in us. Health is always wealth and this is ever more important in the current economic situation.
Parkway Life REIT is one of Asia’s largest listed healthcare real estate investment trusts. It invests in income-producing real estate and related assets primarily used for healthcare purposes. The trust’s portfolio includes over 64 properties across the Asia Pacific region as shown above, encompassing hospitals like Mount Elizabeth Hospital, Gleneagles Hospital, and Parkway East Hospital, as well as nursing homes in Japan and France.
Its earnings have been largely stable in 2024. A caveat for Parkway is that its hospitals are mainly private hospitals which are generally considered luxury services. This may reduce spending in the short term. However, given my experience in using local healthcare services, the long wait time for surgeries and more life-threatening diseases in public hospitals may prove resilient for Parkway’s operations. Currently, Parkway is paying out 0.59% of dividends and it has been on a growing dividend yield trend since 2022.
5. Kimly
How often do you go to a coffee shop for a meal? Maybe even sip a cup of Kopi, talk about life and world economics.
Does that sound like the formula for a good life? Many of us live this lifestyle and it is part of the Singapore genes.
Will it die off? Unlikely, it is our culture, it is where we get our quick meals, supper for the youngsters and just a simple yet bustling place to hangout at.
Kimly Limited is one of Singapore’s largest traditional coffee shop operators, managing an extensive network of coffee shops, food courts, industrial canteens, food stalls, restaurants, and confectionery shops. Its brands include Kimly Mixed Rice, Kimly Dim Sum, Kimly Seafood “Zi Char,” Tenderfresh Group, and Tonkichi.
Founded in 1990, Kimly expanded from a single coffee shop to a leading F&B retail company. Between 1990 and 2003, it grew to 25 self-managed coffee shops and launched its food division in 2003 with seafood “Zi Char” and Mixed Vegetable Rice stalls. In 2006, the company established its headquarters in Woodlands and a central kitchen to improve food production efficiency. In 2025, it is already paying out 3.28% of dividend yield, with previous years offering about 4-6% dividend yields. It ended 2024 with 6.95% dividend yield, showing the desire of the business to improve shareholder value.
The company strategically secures locations in mature estates, ensuring high food stall occupancy and strong brand equity. Its earnings for 2024 had also been stable, suggesting the strong hawker culture in Singapore. While the inflation pressure has been significant on coffee shops, the demand for such dining services is high especially when people are expecting to tighten their wallets.
Final thoughts
The businesses mentioned above operate with relatively high demand inelasticity during a possible economic downturn. Food, transport, healthcare, and the internet are necessities, we can’t live without them and no matter how high inflation goes, spending on these items will prevail. With the dividend yields that these businesses are providing, it is also a strong buffer to provide us with a good cash flow while tiding through these difficult times. Having a positive cashflow will also improve our mentality towards the market and reduce our desire to act rashly when unexpected market moves happens.
Currently, it’s a broad market de-risking, where everyone is selling in a bid to become more risk-averse. These stocks may also come down due to broad market sentiment but their exposure to overseas markets is largely limited or highly defensive. Furthermore, while the volume of their sales will greatly depend on the demand of Singaporeans as spending may decrease, these are the businesses which could likely preserve value much better than other businesses in the current environment. In this write up, I generally put less emphasis on financials as it is very likely to be different in 2025 given the sudden change in economic environment. However, the ability of the business to maintain sustainable earnings and trends in the past few years will be a testament of their resilience. Understanding human behavior, our culture and psychology would be the most fundamental guide towards navigating the financial market especially in such times. Numbers less so.
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