Singapore controlled the Covid-19 situation better than many other countries. Although we had a scare when the number of cases escalated in among the foreign workers, we managed to prevent a subsequent wave from happening (hope I don’t jinx it). This was unlike countries like Hong Kong and South Korea which experienced more than one wave of outbreak.
PM Lee has announced that we’ll be moving into Phase 3 on 28 Dec. This may bring some good news and attract investors’ capital to some stocks. In brief, Phase 3 entails the following:
- increasing gathering group size from 5 to 8
- selected public space capacity limits to be increased from two zones of 50 persons to multiple zones of 50 persons
- bars, pubs, karaoke lounges and nightclubs may reopen via limited pilot programmes
reopening of borders – travelers from low-risk regions are allowed to enter Singapore with a COVID-19 test instead of a Stay-Home Notice (SHN), while those from higher-risk countries/ regions are required to serve a SHN at home or at dedicated facilities
*This list is accurate as of time of writing.
I did a mental exercise to predict which stocks could potentially do well.
Travel and hospitality
Our borders are not likely to be completely open just yet. But I believe that we’re working towards it, especially since PM Lee mentioned that;
“trade and travel are our lifeblood. The longer our borders stay closed to travellers, the greater the risk of us permanently losing out as an international hub, consequently hurting out livelihood.”
Source: PM Lee’s speech, 14 Dec
It doesn’t take a genius to know that the travel sector would be one of the biggest beneficiaries once more travel bubbles are established.
Our national airline, SIA, would have some respite. Hotels have suffered too, albeit less than the airlines, since they could take in some revenue from quarantine requirements and staycations.
- SIA (SGX:C6L) – more routes mean more moolah. Also noteworthy is that SIA is certified by the International Air Transport Association (IATA) to handle and transport pharmaceutical supplies.
- SIA Engineering (SGX:S59) – more flying means more maintenance needed
- SATS (SGX:S58) – more flights means more baggage handling and food orders
- Far East HTrust (SGX:Q5T) – many hotels in Singapore awaiting tourists to stayover
- Amara (SGX:A34) – has two hotels in Singapore – Amara Singapore and Amara Sanctuary Resort Sentosa
- Hotel Grand Central (SGX:H18) – hotel in the heart of Orchard Road
- Hotel Royal (SGX:H12) – two hotels in Singapore; one in Newton and another at Queen St
- Genting Singapore (SGX:G13) – not to forget its casino, hotels and entertainment spots
Retail
Retail wasn’t hit as badly as most people would have thought. Singaporeans still love their shopping. The heartland malls were pretty crowded while the malls in the city had seen less footfall because of the lack of tourists and workers who got to work from home. But this could change.
- Capitaland Integrated Com Trust (SGX:C38U) – having a sizeable exposure to office and malls in the central region
- Suntec REIT (SGX:T82U) – ditto CICT
- Starhill Global REIT (SGX:P40U) – Ngee Ann City and Wisma Atria have been missing their tourists
- Lendlease Global Com REIT (SGX:JYEU) – the prized 313 Somerset (Foot Locker crowd beware!)
- SPH REIT (SGX:SK6U) – Paragon is still a classy place in Orchard and houses a lot of clinics for medical tourists
- Wing Tai (SGX:W05) – not just a developer, but it has been retailing top brands such as Adidas and Uniqlo in Singapore
Transport
We have began to experience busier roads and trains as folks are allowed to return to office to work in alternating teams. If alternate working arrangement are eased later on, more people would be expected to make trips to the office regularly. This would mean a greater utilization of our transport facilities. The beneficiaries would be…
- SBS Transit (SGX:S61) – Runs buses and MRTs.
- ComfortDelGro (SGX:C52) – Owns part of SBS Transit and has the biggest fleet of taxis in Singapore.
Restaurants and bars
Large gatherings were out and restaurants have lost significant amount of revenue. Tourists can also contribute a big part of the revenue for selected restaurants too. I bet many restaurants have been hoping for Phase 3 to arrive. Bars have had it worse than restaurants as they could not reopen unless they serve food too and have to be approved by the authorities.
Hopefully restrictions imposed on them may be eased soon, so that they can return to business as soon as possible. When that happens:
- Jumbo (SGX:42R) – its chili crabs are popular among tourists
- No Signboard (SGX:1G6) – another restaurant known for crabs and owns the beer brand, Draft
- ABR (SGX:533) – Swensen’s restaurants and a huge bowl of Earthquake ice cream only make sense if you have enough people to share the load
- Katrina (SGX:1A0) – owns a myriad restaurant brands such as Bali Thai and So Pho
- RE&S (SGX:1G1) – popular Ichiban Sushi and Kuriya restaurants
- Soup Restaurant (SGX:5KI) – atas chicken rice
- ST Group Food (SGX:DRX) – operates many brands such as Ippudo and Gong Cha
- Tung Lok (SGX:540) – tung lok restaurants have always been a good place for gatherings
Healthcare
Singapore is known for her high standards of medical care. However, many private clinics have suffered because they generate substantial revenue from medical tourism. An opening up of travel bubbles would be very much welcomed and revenue should start to improve from there.
- TalkMed (SGX:5G3) – oncology specialists.
- Parkway Life REIT (SGX:C2PU) – owns the most number of private hospitals in Singapore – Mt Elizabeth, Gleneagles and Parkway East
- Raffles Medical (SGX:BSL) – the iconic Raffles Hospital needs medical tourism to come back
Phase 3! Phase 3! Phase 3!
I guess Singaporeans are looking forward to Phase 3 more than the Christmas or New Year celebrations. Some businesses have been making much lesser revenues due to the restrictions imposed upon them and Phase 3 should alleviate their sufferings.
Travel and hospitality should see the biggest improvements once once more travel bubbles are established. Retail in central areas, restaurants for gatherings, bars, transport and private medical clinics that serve medical tourists should benefit as well.