[SINGAPORE] Singapore stocks with regional exposure could suffer “negative spillover” effects from slowing South-east Asia economies hurt by high Trump tariffs, CGS International analysts said.
Among Asean countries, Cambodia, Vietnam and Thailand were slapped with the highest reciprocal tariffs by the US – at 49, 46 and 36 per cent, respectively.
The tariffs will hobble the three economies significantly as all three count the US as their biggest export market and record substantial trade surpluses with the world’s biggest economy.
Malaysia, which faces a 24 per cent tariff, exports to Singapore, China and the US in that order, and also has a trade surplus with the US. Singapore, on the other hand has a trade deficit with the US – it imports more than it exports to the US.
Impact by proxy
In its research note, CGS International analysts Lock Mun Yee and Lim Siew Khee said Singapore stocks with more than 10 per cent exposure to Vietnam, Malaysia and Thailand could be indirectly affected.
“We think the negative sentiment could spill over to stocks with exposure to China+1 locations – such as Vietnam, Malaysia and Thailand,” they said. The China+1 strategy refers to companies minimising their supply chain dependency on China by diversifying and establishing operations elsewhere.
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These include names such as OCBC, Thai Beverage, Frencken, Nanofilm, and Aztech Global, which could be directly or indirectly affected.
CGS International estimates that 11.4 per cent of OCBC’s revenue is exposed to Malaysia, 64.7 per cent of Thai Beverage’s revenue is exposed to Thailand, and 46 per cent of Aztech Global’s revenue is exposed to Malaysia.
Direct impact
Stocks that are directly affected by tariffs and face “choppy sentiment” include ground handler Sats and Chinese vesselmaker Yangzijiang Shipbuilding.
Sats would be hit when de minimis tariff exemptions end on May 2. The exemptions allow small packages worth up to US$800 from China and Hong Kong to enter the US duty-free.
The analysts estimate that Sats has up to 15 per cent revenue exposure to US cargo. Cargo contributed to 50 per cent of the group’s revenue, and around 30 per cent of cargo processed was attributed to the Americas, based on nine-month disclosures for financial year 2025.
“However, we 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,” they said.
In the near term, they favour “defensive” names. “We reiterate our risk-off strategy in the near term, preferring stocks with more certainty in earnings, such as real estate investment trusts (Reits) and high dividend yield plays.”
They advocate investors going for large-cap defensive names such as ST Engineering, CapitaLand Ascendas Reit and Keppel DC Reit.
Impact on tech stocks
The analysts said tech manufacturing stocks could be affected as tariffs and a potential trade war may spark a global recession, which would reduce industrial and consumer demand for goods.
They highlighted that most tech stocks under their coverage adopted a China+1 strategy to mitigate the previous trade tariffs. These stocks now face tariffs in Malaysia and Vietnam, where operations have moved to.
Tech companies surveyed by CGS International are absorbing tariffs into the supply chain and passing it along the production process, they added.
While semiconductor imports to the US are currently exempted from tariffs, the threat of a reversal is real, the analysts said. Such tariffs, if levied, would be separate from current reciprocal tariffs.
Drag on Singapore growth, employment
Despite its baseline 10 per cent tariff, Singapore’s open and trade-reliant economy could experience “ripple” effects from a slowdown in the region.
“Over time, a sharp increase in protectionism could lower regional growth by one to two percentage points over FY2026 and FY2027 forecasts – the worst since the Asian financial crisis (excluding pandemic years),” said the analysts.
As the Republic is vulnerable to global trade policy changes, the dampened global and regional growth that will follow Trump’s tariffs could weigh on Singapore’s growth and reduce employment opportunities, they said.
They think the gross domestic growth outlook could come in at the lower end of the predicted range of 1 to 3 per cent, forecasting 2.5 per cent GDP growth for FY2025.
Furthermore, while pharmaceuticals and semiconductors are currently spared tariffs, other key exports – including machinery, medical apparatus, precision engineering equipment, as well as ships and boats – will be affected, they said.
