5 investment themes for Singapore 2025

Singapore REITs are seen to benefit from lower rates as policy reforms boost market depth.

Singapore’s investment outlook for 2025 will be shaped by opportunities in REITs, high-dividend stocks, small- and mid-cap equities, value-unlocking initiatives, and defensive sectors, according to RHB.

RHB said it remains positive on Singapore REITs, citing lower funding costs and improving distribution visibility amid expectations of interest rate cuts from the US Federal Reserve. It noted that the sector’s valuations remain attractive, with capital inflows expected to continue “amidst limited yield alternatives.” Policy and liquidity tailwinds, including the $5n Equity Market Development Partnership (EQDP) and new index inclusions, are also expected to boost visibility and narrow valuation gaps.

Beyond REITs, RHB highlighted opportunities in companies offering high dividend yields. “The Singapore market continues to provide amongst the region’s highest forward dividend yields, coupled with a relatively stable currency,” it said. 

The bank screened for firms with yields exceeding 5.1% and positive earnings outlooks, saying these could appeal to investors seeking steady income outside of the REIT space.

The EQDP is another major theme expected to support market liquidity and investor participation. The Monetary Authority of Singapore (MAS) has deployed an initial $1.1b under the initiative to seed funds investing in Singapore-listed securities, including IPOs and secondary offerings. Among these, the Fullerton Singapore Value-Up Fund became the first retail fund under the scheme.

According to RHB, these efforts will likely channel investor flows into mid-cap equities and improve valuation convergence across the market. It also noted that new indices such as the SGX iEdge Singapore Next 50 could enhance visibility and attract passive fund participation, potentially paving the way for exchange-traded funds based on these benchmarks.

On corporate governance and shareholder value, RHB referenced the government’s upcoming “value-up” initiatives, aimed at strengthening the capabilities and communication of listed firms. Minister for National Development and Deputy Chairman of the MAS Chee Hong Tat outlined the plan in September, focusing on strategic excellence, transparent investor relations, and stronger business communities. RHB said such efforts would create “a virtuous cycle of capability, communication, and collaboration” to drive long-term shareholder value.

Lastly, the report underscored the importance of defensive positioning amid global uncertainty. While export-driven sectors face trade-related risks, Singapore’s domestic economy benefits from supportive fiscal and monetary policies and subdued inflation. 

RHB encouraged investors to focus on companies with stable cash flows and non-cyclical demand.

Sectors such as consumer staples, healthcare, telecommunications, land transport, and industrial REITs were identified as resilient segments well placed to withstand macroeconomic volatility.