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Channel NewsAsia:A muted response to the government's budget is expected on the Singapore stock market on Monday.
Analysts Channel NewsAsia spoke to expect a neutral to slightly negative reaction by investors.
Many of the key measures announced on Friday by Deputy Prime Minister and Minister for Finance Tharman Shanmugaratnam were well within market expectations, including a move to cut to the proportion of foreign workers that Singapore companies can hire.
"In terms of market impact, the measures are not really something that came as a big surprise. They have already been flagged and companies are already prepared and well aware that foreign worker costs will go up," CIMB regional economist Song Seng Wun said.
Nonetheless, conditions will be tougher for some businesses.
Sectors most prone to negative sentiment are those affected by the tightening of foreign labour restrictions.
These include manufacturing, construction and services.
PwC Services tax partner David Sandison said further restricting foreign worker employment doesn't address the problems of a tight labour market.
"The proposed measures will simply make it more difficult for local businesses, which are starved of appropriately qualified human capital, to meet their resource needs," Mr Sandison said.
The government expects costs to rise for 500 manufacturers and for 850 services companies, as a result of lower dependency ratio ceilings (DRC).
The DRC is a maximum ratio of local to foreign workers, imposed by the government on employers.
Another budget measure that is likely to interest investors is the tax exemption for transactions involving the trade of investment-grade gold, which was broadly welcomed.
"Oil, FX and commodities have been major trading areas here. With the dynamism that we've seen in the gold market over the past few years, it is quite natural to work towards building physical gold trading here," said Kelvin Tay, UBS chief investment strategist for Singapore.
Robert Tsang, head of indirect tax services at Deloitte Southeast Asia, noted that precious metals trading had become a substantial business for Singapore.
"The GST exemption on investment-grade gold should simplify compliance and help cash flow," he said.
Elsewhere, analysts say hospitality and tourism-related stocks may receive some support from the government's additional S$905 million top-up of the Tourist Development Fund aimed at attracting higher-spending tourists.
Meanwhile, adjustments to the withholding tax exemption for vessel charter payments may be a boost for the offshore & marine services industry.
Tag:Latest news Channel NewsAsia.Search result Channel NewsAsia.All About Channel NewsAsia.Singapore trend Channel NewsAsia.channelnewsasia, new york times, singapore budget 2012, stomp, yaw shin leong
Analysts Channel NewsAsia spoke to expect a neutral to slightly negative reaction by investors.
Many of the key measures announced on Friday by Deputy Prime Minister and Minister for Finance Tharman Shanmugaratnam were well within market expectations, including a move to cut to the proportion of foreign workers that Singapore companies can hire.
"In terms of market impact, the measures are not really something that came as a big surprise. They have already been flagged and companies are already prepared and well aware that foreign worker costs will go up," CIMB regional economist Song Seng Wun said.
Nonetheless, conditions will be tougher for some businesses.
Sectors most prone to negative sentiment are those affected by the tightening of foreign labour restrictions.
These include manufacturing, construction and services.
PwC Services tax partner David Sandison said further restricting foreign worker employment doesn't address the problems of a tight labour market.
"The proposed measures will simply make it more difficult for local businesses, which are starved of appropriately qualified human capital, to meet their resource needs," Mr Sandison said.
The government expects costs to rise for 500 manufacturers and for 850 services companies, as a result of lower dependency ratio ceilings (DRC).
The DRC is a maximum ratio of local to foreign workers, imposed by the government on employers.
Another budget measure that is likely to interest investors is the tax exemption for transactions involving the trade of investment-grade gold, which was broadly welcomed.
"Oil, FX and commodities have been major trading areas here. With the dynamism that we've seen in the gold market over the past few years, it is quite natural to work towards building physical gold trading here," said Kelvin Tay, UBS chief investment strategist for Singapore.
Robert Tsang, head of indirect tax services at Deloitte Southeast Asia, noted that precious metals trading had become a substantial business for Singapore.
"The GST exemption on investment-grade gold should simplify compliance and help cash flow," he said.
Elsewhere, analysts say hospitality and tourism-related stocks may receive some support from the government's additional S$905 million top-up of the Tourist Development Fund aimed at attracting higher-spending tourists.
Meanwhile, adjustments to the withholding tax exemption for vessel charter payments may be a boost for the offshore & marine services industry.
Tag:Latest news Channel NewsAsia.Search result Channel NewsAsia.All About Channel NewsAsia.Singapore trend Channel NewsAsia.channelnewsasia, new york times, singapore budget 2012, stomp, yaw shin leong
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