REITs, high-yield stocks are investors' top defensive plays against tariffs

KDCREIT, ST, STE, and CLAR amongst those named by CGS International analysts.

It’s time to get defensive with your investments and stocks, a brokerage firm advised Singapore investors.

Whilst Singapore is perceived to be less hit by the US’ recently announced reciprocal tariffs— getting only the 10% base rate tariff versus its Southeast Asian peers— negative spillover is likely, said CGS International analysts Mun Yee Lock and Siew Khee Lim.

Lock and Lim expect Singapore’s machinery, including apparatus and precision engineering equipment, as well as ships, boats, and other floating structures to be most affected by the tariffs.

“We reiterate our risk-off strategy in the near term, preferring stocks with more certainty in earnings, such as REITs and high dividend yield plays. We advocate investors to go for large-cap defensive names,” Lock and Lim said, naming KDCREIT, ST, STE, and CLAR.

One stock that might be hit with higher costs is SATS, which has up to 15% revenue exposure to US cargo.

However, Lock and Lim expect the impact on profitability to be partially mitigated, given a lack of readily available substitutes of similar affordability for imported goods such as fast fashion products into the US, with cost being absorbed by consumers.