Singapore enjoys a very stable political system, attracting a number of our clients. It is a leading party in signing regional free trade agreements, which is likely to give the country more influence in Asia. In the face of regional competition for both exports and investment, the government is encouraging economic diversification to boost competitiveness. New areas being promoted include biomedical sciences, medical services, financial services and tourism.

We keep our clients informed of the latest market moves and political developments in Singapore, as part of our 'top-down' and 'bottom-up' perspective. Clients also benefit from in-depth analysis on 18 of Singapore’s most important industries. We provide interactive data and forecasting alongside detailed and risk-assessed analysis from our results-proven research teams. Our aim is to keep you one step ahead, so you can operate with confidence in Singapore.

Singapore Country Risk

BMI View:

Core Views

  • The ruling PAP's landslide victory in 2015's elections, along with a comfortable by-election victory in May 2016, support our assertion that the party is experiencing a resurgence in popular support. However, we expect the party to broadly retain its policy strategy adopted in 2011, as its more consultative approach to governance appears to have paid significant dividends. This entails a continued emphasis on restructuring the labour force away from its dependence on foreigners, as well as strategic investments into productivity enhancing measures.

  • Singapore is likely to experience modest real GDP growth through 2017, and we maintain our forecast for real GDP growth to come in at 1.7% in 2016 and 2.2% in 2017. Poor external demand and structural domestic trends will keep headline GDP growth subdued, although we believe that a...

Singapore Operational Risk Coverage (9)

Singapore Operational Risk

BMI View:

BMI View : Singapore offers the most appealing destination for investment in the world. This is largely because the government has successfully developed the city-state into a major global hub for trade, investment and finance by providing a stable and secure operating environment, world-class logistics connections and an open economy which is highly conducive to foreign direct investment (FDI). There are no significant risks facing businesses located in Singapore, with the main concerns stemming from increasing restrictions on the employment of foreign nationals. The city-state's minimal risks and manifold attractions are reflected in a global ranking of first out of 201 states in the overall BMI Operational Risk Index, with a score of 83.4 out of 100.

Strong Trade and Investment Environment Improves Operational Risk Score
Singapore - Operational Risk Scores

Singapore Crime & Security

BMI View:

Overall Singapore fares very well on the BMI Crime and Security Risk Index, with the low domestic crime rate, strong regional and international relations and well developed police and armed forces giving the country a score of 79.6. This puts Singapore in third position in the Asia region, pointing towards a very secure operating environment for potential international investors.

We see the greatest (albeit still limited) security risk to Singapore coming in the form of piracy on the Straits of Malacca, which would drastically affect the country's position as a global trade and shipping hub. We would also note that risks are heightened somewhat by Singapore's close ties with the US, and the ever-present threat of the expansionist tendencies of the militant terrorist organisation Jemaah Islamiyah. The country's strong record on counter terrorism capability helps to redeem Singapore's overall assessment for terrorism...

Singapore Labour Market

BMI View:

Singapore offers limited risks to incoming investors and businesses with regards to the labour market. The key risks are the increasingly stringent regulation surrounding the importation of foreign labour into the country, a limited overall labour participation rate as female participation is still below 60%, and the threat of rising wages. However, these risks are outweighed by the significant advantages, which include a 100% urbanised population, extremely flexible labour market and one of the best education systems in the world, resulting in a highly skilled workforce. Overall, the country receives a score of 75.1 out of 100 for Labour Market risks, leaving it in first place before New Zealand.

With regards to the school education system in Singapore, the risks to businesses are minimal as the country's...

Singapore Logistics

BMI View:

BMI View: Singapore is a well-established regional and global trading hub, with a highly developed transport infrastructure and a government that is welcoming of international trade. There are few risks to investors with regards to the supply chain in Singapore, though we do highlight some key downward factors in terms of potential market size and utilities which could limit future growth as well as raise operating costs in the future. These considerations lead to a score of 79.9 out of 100 in the Logistics Risk rating.

Singapore's economy is heavily reliant on manufacturing, with machinery and electronics two key sectors. Pharmaceuticals are also a growth area, and the country is one of the largest crude oil refiners globally. The supply chain is well set up to cater for these industries, with specialised facilities at the...

Singapore Trade & Investment

BMI View:

We view Singapore as an extremely attractive, low risk destination for investment, and one which offers numerous opportunities with regards to trade. The extensive trade agreements, limited tariffs and vast trade flows due to its key geographic position offer significant advantages. Moreover, the extensive legislation protecting investors, and their intellectual property rights further limit risks. In addition, the government is actively encouraging foreign investment, as the soaring levels of FDI highlight. However, risks remain in the form of persistent corruption, and an overreliance on trade partners who are vulnerable to economic slowdowns. Therefore overall, Singapore receives a Trade and Investment risk score of 92.2, which puts it first from both a regional and global perspective, ahead of competitor Hong Kong with a score of 87.8

A commitment to a low tax regime and high levels of investment in infrastructure ensure Singapore has a...

Singapore Industry Coverage (19)

Singapore Autos

BMI View:

BMI View: The vehicle de-registration and replacement process will drive total vehicle sales growth to its peak of some 131.500 vehicles before entering a sustained decline to 2020. Commercial vehicle sales will continue to decline to 2020 having reached a peak in 2015, while any sales growth drivers associated with construction are already priced into the market.

Total Vehicle Sales Growth To Be Supported By 10-Year Validity Period And COE De-registration
Total Vehicle Sales
f = BMI forecast. Source: LTA, BMI ...

Singapore Commercial Banking

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Commercial Banking Sector Indicators
Date Total assets Client loans Bond portfolio Other Liabilities and capital Capital Client deposits

Singapore Consumer Electronics

BMI View:

BMI View: Singapore is a lucrative consumer electronics devices market, reflecting the high incomes of households and consumer appetite for the latest devices. Premium-oriented vendors have performed particularly well, most notably Apple and Samsung Electronics. The downside to these characteristics is that by 2016 most device categories are saturated, including traditional PCs, tablets, flat-panel TVs and smartphones - meaning growth prospects are limited compared to much of the rest of APAC. The market will nonetheless remain attractive due to relatively short replacement rates and high average selling prices, and there are a few product categories with potential for outperformance such as Ultra-HD TV sets once the supply of content increases, and wearable devices if vendors can make significant progress on functionality and price to truly move into...

Singapore Defence & Security

BMI View:

BMI View: Singapore will remain an attractive defence market over the coming decade, as regional tensions, transnational terrorism, cyberthreats and maritime piracy continue to drive military spending by the city-state. While the number of Singaporean military personnel is set to decline, spending on training, activities and equipment will rise, as the government works to strengthen the SAF's capabilities, and provide the force with a qualitative edge over potential enemies. Singapore's defence trade balance will remain in deficit for the foreseeable future - though this will narrow gradually long term as local manufacturers develop capabilities and thus become increasingly capable of capturing both local and international procurement contracts.


Singapore Food & Drink

BMI View:

BMI View: Food consumption will remain modest over our forecast period, registering a compound annual growth rate of 2.1% over 2014-2019.Technological innovations and cost-saving measures by mass grocery retailers will be realised in 2017, and a steady rise in food consumption will be observed. We forecast real GDP growth of 2.5% in 2016, with economic activity remaining tepid over our forecast period. A tight labour market will continue to put upward pressure on labour costs, reducing food manufacturing competitiveness. Rising incomes will bode well for the food and drink industry...

Singapore Freight Transport

BMI View:

BMI View : We hold a positive view on Singapore's freight transport sector in 2016. Although the highly developed nature of the market means that growth will be steady rather than spectacular, an improving outlook in the global economy and ongoing investment in the freight transport network will ensure a continued expansion this year and beyond.

Trade growth in Singapore will remain positive in both real and nominal terms in 2016 and over our medium-term forecast period to 2019. Domestic demand does not paint the whole picture when it comes to Singapore's freight transport sector, however, and as a major global transhipment hub the country handles trade volumes from all over the world. As such, the freight transport sector can be seen as a barometer for the global economy.

According to our projections, road haulage volumes in...

Singapore Information Technology

BMI View:

BMI View: The high-value makeup of Singapore's IT market makes it lucrative, but there is a corresponding lack of growth potential due to the high penetration of devices and solutions. This is particularly true of the hardware segment where the PC market is saturated, and the outlook has weakened as tablet demand is cannibalised by the phablet. Singapore does still have growth potential, for instance in cloud computing and Internet of Things solutions, where its high-value enterprise mix, supportive policy environment and regional hub status are conducive to the adoption of the latest technologies....

Singapore Infrastructure

BMI View:

BMI View: Singapore's construction sector growth is set to slow over the coming quarters, which is in line with our outlook for the city-state's economy. Factors such as a weak property market and tighter labour conditions will weigh on growth in the sector, although the introduction of large scale public infrastructure projects will provide a degree of support to the sector.

Latest Updates And Structural Trends

  • We maintain our 2016 construction growth forecast at 1.5% owing to a weak domestic economic growth environment, which is compounded by slowing activity in residential construction.

  • Singapore's construction sector will continue to be driven by ongoing public investment in transport infrastructure over the coming years. It will be broad-based, and will involve construction in areas...

Singapore Insurance

BMI View:

BMI View: Singapore's non-life segment is dominated by coverage of commercial risks outside the city state. We remain of the view that the entire ASEAN region will face economic headwinds over the coming year or so, and have left our forecasts broadly unchanged. We think that the life segment will continue to achieve steady growth through the forecast period, thanks to innovation by the insurers in a wealthy country with a structurally high rate of savings.

Headline Insurance Forecasts (Singapore 2013-2020)
2013 2014 ...

Singapore Medical Devices

BMI View:

BMI Industry View: Rising healthcare costs have led to a revamp of the country's medical insurance scheme in 2015 making it compulsory for all. Demand for healthcare has also resulted in new healthcare development projects announced through to 2020. The large biomedical production industry continues to be a major sector in Singapore's total manufacturing output and the country continues to serve as a distribution hub for the region.

Projected Medical Device Market, 2014-2019
Total (USDmn) Per Capita (USD) ...

Singapore Oil & Gas

BMI View:

BMI View: Singapore will remain a large net importer of crude oil due to the country's large downstream sector, which is the largest in South East Asia. While the country will retain its refining hub status in the region, it will face increasing competition from refiners in emerging markets such as China and India. The maritime sector will continue to account for the largest source of domestic oil demand over the next decade.

Headline Forecasts (Singapore 2013-2019)
2013 2014 2015f

Singapore Petrochemicals

BMI View:

Singapore will struggle in 2016 in the face of a Chinese downturn and regional oversupply, which is undermining export growth and reducing margins. However, recovery is expected in the medium term as producers diversify markets, with India and Indonesia likely to compensate for losses in exports to China.

The Jurong Aromatics Company (JAC) complex, of the world's largest aromatics complexes, is now in the control of receivers following its shutdown in December 2014 after just four months of operation. The complex consists of a condensate splitter and plants with capacity for 800,000 tonnes per annum (tpa) of PX, 200,000tpa of OX and 450,000tpa of benzene using UOP technology. It can also produce 2.5mn tpa of fuels, including jet fuel and kerosene. Receivers will seek a debt resolution which could see it back in operation in 2016.

The JAC shutdown and sluggish markets meant that the...

Singapore Pharmaceuticals & Healthcare

BMI View:

BMI View: The delivery of healthcare in Singapore will continue to change as the country looks to deepen the integration of technology with its medical sector. This will see a shift in the flow of patients seeking medical services, their interaction with physicians and potentially the use of pharmaceuticals as mobile applications play a greater role. Consequently, drugmakers will have to adapt their marketing strategies to account for these shifts in the patient journey to capture the commercial opportunities in the Singapore market.

Headline Expenditure Projections

  • Pharmaceuticals: SGD1.1bn (USD798mn) in 2015 to SGD1.2bn (USD844mn) by 2016; +5.4% in local currency terms and 5.7% in USD terms. US dollar values upgraded in line with shifts in currency.

  • Healthcare...

Singapore Power

BMI View:

BMI View: While other thermal sources - mainly oil - play a role, most of Singapore's electricity is generated from natural gas. From this perspective it should be noted that the country plans to fuel additional capacity with LNG. Similarly, Singapore is one of the leaders in renewable energy in the region. Yet feedstock constraints weigh on the overall development of renewable capacity. G...

Singapore Real Estate

BMI View:

BMI View: Singapore is a global financial and retail hub, with a strong tourist trade and a resilient economy. The commercial real estate market is mature, and has a large number of domestic and international players. However, Singapore's economy is externally oriented, and as such growth in the commercial real estate sector could be dampened by a global slowdown.

Economic growth was slow over 2015 due to a slowdown in major trade partner China. Although a recovery in global markets is expected to boost the Singaporean economy in 2016, we expect growth in the commercial real estate sector to be subdued. The office sub-sector should be more dynamic than the other two sub-sectors that we cover, retail and industrial. Indeed, the industrial sub-sector is currently affected by oversupply, and rental values may fall.

Singapore's economy managed to stave off...

Singapore Retail

BMI View:

BMI View: Singapore's economy continues to suffer from the slowdown in its key export markets as well as ongoing weakness in its domestic manufacturing and construction sectors. This has resulted in gradually softening consumer sentiment, while traditional brick and mortar retailers have been coping with high operation costs and are facing an increasing competition from online retailers. While this will trigger a number of store closures over the next few quarters, we hold a much more optimistic outlook for Singapore's retail sector over the medium term.

Headline Household Spending...

Singapore Telecommunications

BMI View:

BMI View : Singapore's mature mobile market could experience a change in competitive landscape in 2016/2017, with the entrance of a fourth mobile operator possibly affecting a faster decline in ARPU. However, opportunities in the Internet of Things (IoT) are ripe and we expect the launch new services and innovative products in 2016 to bolster revenue growth and subscriber retention.

New Entrant Will Need A Disruptive Strategy To Wrestle Subscribers Away From Incumbents
Singapore Mobile Market Forecasts

Singapore Tourism

BMI View:

BMI View: Singapore's tourism market is well-developed with a strong reputation. Arrivals will continue to grow through the forecast period, though at a slightly subdued rate. Investment in infrastructure by the government is expected to further connect the city-state to regional hubs, supporting industry growth. The hotel sector remains slightly saturated, though investment opportunities still remain in the luxury segment. Downside risks exist in the form of the Zika threat, as a number of cases were recently reported, and a further spread could threaten the industry....

Singapore Water

BMI View:

BMI View: The government has made water availability, water technologies and environmental conservation the key areas of focus over the past few years, and this, in conjunction with the surging demand for residential and industrial water solutions, has driven interest in the Singaporean water industry, with rising numbers of domestic and international players present in the infrastructure, management and utilities sectors.

Headline Water Forecasts
2012 2013 2014e 2015f 2016f...

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