SG Morning Highlights | Singapore inflation higher in January after GST hike; headline at 6.6%, core at 5.5%

Advancers / Decliners is 90 to 63, with 178.60 million securities worth S$113.48 million changing hands.

Many economists continue to expect monetary policy tightening at the Monetary Authority of Singapore's (MAS) April meeting, after January's inflation data – released on Thursday (Feb 23) – came in higher than in December. But Barclays economist Brian Tan maintains that there is "little reason to tighten".

Headline inflation edged up to 6.6 per cent year on year in January, from 6.5 per cent in the previous month, due to higher accommodation inflation and core inflation.

Core inflation, which excludes accommodation and private transport, rose to 5.5 per cent year on year, from 5.1 per cent in December 2022. This was on the back of higher inflation for services, food and retail and other goods, along with the increase in the goods and services tax (GST) rate from 7 per cent to 8 per cent.

Workers were the focus of the second day of the Budget debate, as Members of Parliament suggested more support – for the unemployed, self-employed, and middle-income – or raised the need to get Singaporeans into certain trades and industries.

Nine labour MPs were among the 29 who spoke on Thursday (Feb 23). Patrick Tay, assistant secretary-general at the National Trades Union Council (NTUC), reiterated his call for short-term financial support for workers who have lost their jobs.

This would give them "the space to upgrade their skills and look for suitable employment, with the knowledge that they would be able to continue supporting their family's basic needs".

Singapore's inflation rose across the board in January, but came in slightly under economist estimates, data from the Monetary Authority of Singapore (MAS) and Ministry of Trade and Industry (MTI) showed on Thursday (Feb 23).

In the first month of 2023, headline inflation edged up to 6.6 per cent year on year, from 6.5 per cent in the previous month, due to higher accommodation inflation and core inflation, partially offset by easing private transport costs.

Core inflation, which excludes accommodation and private transport, rose to 5.5 per cent year on year, from 5.1 per cent in December 2022. This was driven by higher inflation for services, food and retail and other goods, along with the increase in the goods and services tax (GST) rate.

Revenue in H2 was, however, 17.9 per cent higher at S$4.8 billion, from S$4 billion in the same period a year earlier.

Earnings per share for the full year fell to S$0.1718, from S$0.183 previously.

The bank's earnings for the quarter missed the S$1.6 billion average estimate based on four analysts polled by Bloomberg.

Net earnings for the full year grew 18 per cent to a record S$5.7 billion from S$4.9 billion for FY2021. This translates to an earnings per share of S$1.27 for FY2022, up 18 per cent from S$1.07 for FY2021.

Earnings per share improved to S$0.321 from S$0.258. Revenue in the period rose 14.9 per cent to S$86.6 million, from S$75.3 million.

The group, which engages in investments and leisure activities, among others, attributed the improved performance to an increase in consumer spending on health products as global economies recover from the pandemic.

This translates to an earnings per share of 2.83 sen, from 7.47 sen in the previous year.

Revenue was down 42.7 per cent to RM235.2 million, compared to RM410.2 million in the corresponding quarter last year.

This was mainly due to lower employee benefit expenses, which fell 8.3 per cent to S$42.3 million during the second half (H2) of FY2022.

Earnings per share for the period stood at 3.30 Singapore cents per share, up from 2.95 cents per share in the same period of 2021.