Budget 2026 focuses on strengthening the economy’s competitiveness and resilience. Boosting AI adoption and internationalization were a key focus of the Budget as expected. There were also pro-market measures, like the S$1.5bn Equity Market Development Program (EQDP) boost and new CPF life-cycle investment scheme.
- Read this at SGinvestors.io -
A wide S$8.5bn fiscal surplus (1% of GDP) is projected for FY2026, the first year of the new electoral term. This preserves some dry powder to draw upon in the event of any unexpected shock or downturn.
Financials Sector
For Banks: 40% corporate tax rebate should benefit SMIDs by lowering cost pressures and improving competitiveness. This may lower NPL risks in the sector. It could also drive higher credit demand as it may provide some firms with improved balance sheet flexibility.
For Banks: AI related tax deductions and AI Champions program could accelerate further AI deployment in the sector. The selection of the financial sector as one of the National AI Missions could have positive outcomes for the Big 3 banks, who are already advancing AI use cases. For NBFIs, this could catalyse faster transformation. Cost savings and new revenue potential could drive better sector ROEs in the medium term.
- Read this at SGinvestors.io -
For Banks and NBFI: Up to 70% of funding support and double taxation deductions for SMIDs to expand overseas could support faster earnings growth and a broadening of revenue bases. It may drive more credit demand from this segment as well to supplement government funding. Separately, this may trigger more capital market activities by the sector for additional growth funding. It could also attract more liquidity by offering more compelling growth prospects. This could drive higher equity trading volumes and also drive higher brokerage commissions and for the banks, IB&A fees.
For Banks and NBFI: S$1.5bn top ups to the Anchor Fund and an additional S$1.5bn top up to the Financial Sector Development Fund (FSDF) to support the equity market is positive. On one end, this could encourage more diverse IPOs improving Singapore's relevance as a equity capital raising destination. On the other end, when the additional S$1.5bn of EQDP is placed with asset managers on top of the original S$5bn can provide an extra boost to market liquidity and also support higher baseline valuations. This should benefit both large caps and SMIDs, with an extra weighting towards the latter. Overall, positive for liquidity, brokerage fees and IB&A fees.
Stock Impact:
Read more at SGinvestors.io.
Above is an excerpt from a report by Maybank Research. Clients of Maybank Securities may be the first to access the full PDF report @ https://www.maybanktrade.com.sg/.
Chua Hak Bin Maybank Research | Brian Lee Shun Rong Maybank Research | Thilan Wickramasinghe Maybank Research | https://www.maybanktrade.com.sg/2026-02-13
Use Trust Referral Code PGKPSWAE to sign up NTUC Link or Trust Link Credit Card or open a Trust Bank Savings Account: ✨Earn up to S$1,888 cashback reward 🎟 !
