Credit Brief on Singapore SMEs Q2 2019
This is a quarterly report jointly published by the CRI at the Risk Management Institute of National University of Singapore and Validus Capital. Read the full report here →
Overall, the NUS-CRI 1-year PD increased slightly during Q2, from 25.28bps in March to 26.27bps in June. The credit profile of Singapore SMEs deteriorated amid the slower than expected GDP growth at 0.1% in Q2 2019 based on advance estimates from the Ministry of Trade and Industry (MTI).
According to the survey conducted by the Singapore Business Federation and DP Information Group, Singapore SMEs remain cautiously optimistic about business prospects despite slower economic growth and ongoing geopolitical conflicts. SMEs in the commerce/ trading sectors continue to expect depressed profitability and saw the biggest drop in expectations on access to financing as lenders become more cautious in injecting funds into a sector directly affected by the global trade tensions.
However, SMEs in other sectors saw an uptick in general sentiments as SMEs are planning to take advantage of Budget 2019 and the year-end holiday season.
In addition, growing global headwinds may be driving SMEs to pursue new growth opportunities. For instance, the retail / F&B sectors continued to see an increase in business expansions expectations as they saw greater expansion opportunities while the transport/ storage sectors also saw a boost in expectations due to seeing longer-term opportunities within ASEAN and China.