Singapore healthcare stocks mixed after budget highlights public-sector expansion

Singapore two-dollar bills

Singapore’s healthcare stocks were mixed by Tuesday afternoon, with traders likely wary after Monday’s budget announcement of more public-sector healthcare spending plans.

Raffles Medical was up 0.9 percent, or 1 Singapore cent, at S$1.11 at 2:28 P.M. SGT, while IHH was down 1.44 percent at S$2.06.

CIMB noted that the budget indicated the government plans to increase healthcare spending to at least S$13 billion over the next decade, or to around 3 percent of gross domestic product, up from around 2.2 percent currently.

That would include planned investments of six new general and community Hospitals, four new polyclinics and more nursing homes and elder care centers over the next five years, CIMB said in a note late on Monday.

But CIMB said that shouldn’t negatively affect the private healthcare players.

Budget ‘unlikely to threaten’ private players

”The additional healthcare facilities and hospital beds are unlikely to threaten private hospital players like IHH and Raffles Medical Group,” CIMB said. “The market share of private hospital inpatient admissions has also been stable in recent years.”

It noted that Singapore’s hospital bed density is still low at 2.5 beds per 1,000 people.

CIMB rates Raffles Medical at Add, with a target price of S$1.24. It rates the Malaysia-listed shares of IHH at Add, with a target of 6.36 ringgit.

IHH shares in Malaysia were down 1.29 percent at 6.11 ringgit at 2:39 P.M. SGT.

Singapore two-dollar bills