Singapore’s 2025 budget is expected to boost lending, consumer and green energy sectors, while providing a push to the city-state’s stock market.

The government will increase handouts and rebates to households, Prime Minister Lawrence Wong said in his budget speech Tuesday, as Singapore heads for general elections this year.

It will offer limited rebates on corporate taxes and tax incentives for domestic listings, as the market loses its appeal amid a dearth of new offerings. A S$1 billion ($744.8 million) investment will also be allocated for a research and development semiconductor facility.

Singapore’s stocks benchmark Straits Times Index extended gains to close at a new high Tuesday. The yield on 10-year bond increased 3 basis points, the most in more than a week, while the local dollar was little changed after the announcement.

“From AI to clean energy, this budget cements its leadership in emerging industries, ensuring jobs and investments flow in,” said Mohit Mirpuri, a fund manager at Singapore-based SGMC Capital Pte. “Tax incentives for fund managers and listed firms could sustain STI’s positive momentum from 2024, and enhance capital flows into Singapore.”

The government expects its budget to generate a surplus of 0.9% of the gross domestic product in the fiscal year beginning April. That was unexpected, with a Bloomberg survey of analysts forecasting a deficit.

“Top ups of various infrastructure funds should be positive for loan growth of banks,” said Krishna Guha, an analyst at Maybank Securities Pte. “The measures to defray inflation and support consumption should be positive for retail as well as supportive of bank asset quality.”

WINNERS

Banks

Singapore’s biggest banks DBS Group Holdings Ltd., Oversea-Chinese Banking Corp. and United Overseas Bank Ltd. may see a pick up in business activity and an improvement in asset quality following the new measures, Bloomberg Intelligence analysts Sarah Jane Mahmud and Alison Hor said in a report.

Higher co-funding levels for wage hikes and 50% corporate income-tax rebate are likely to help small businesses manage costs and reduce credit stress for lenders, Bloomberg Intelligence analyst Rena Kwok wrote in a separate note.

REITs

The budget includes cash handouts to Singaporean household to cushion the high cost of living. This may aid retail sales and result in higher turnover rents for retail mall landlords, including CapitaLand Integrated Commercial Trust, Frasers Centrepoint, Suntec Real Estate Investment Trust and Mapletree Pan Asia Commercial Trust, according Bloomberg Intelligence analyst Ken Foong.

Transport

Singapore Airlines Ltd. may indirectly benefit from the government’s latest round of vouchers, as it could help widen local households’ travel budgets, Bloomberg Intelligence analysts Tim Bacchus and Eric Zhu wrote in report.