Why Defence Matters in 2026
The global outlook for 2026 remains uncertain despite lower inflation expectations and impending rate cuts by central banks.
Geopolitical tensions, uneven global economic growth and shifting interest-rate expectations are the key factors driving market volatility.
Given these uncertainties, investors should look towards defensive stocks to help cushion their portfolios with stable earnings and dependable cash flow.
In this article, we look at three defensive Singapore stocks that stand out: Singtel, Sheng Siong and Raffles Medical Group.
Singapore Telecommunications (SGX: Z74, SingTel) – Asia’s Leading Communications Technology Group
Singtel is a leading communications technology group and has a wide presence across Asia, Australia and Africa, with mobile subscribers of over 800 million in 20 countries.
Given Singtel’s telecom business being widely regarded as an essential service and the extensive business operations across different regions, the company is considered a defensive counter in the eyes of investors.
With management’s ongoing efforts to unlock value and asset recycling initiatives, investors can rest assured that future dividends payout is sustainable in the long run.
In its latest half year results ended 30 September 2025 (1HFY2025), Singtel’s operating revenue was down 1.2% year on year (YoY) to S$6.91 billion due to the strong Singapore dollar, given that a large part of Singtel’s revenue is generated from overseas operations.
Despite the decline, Singtel’s underlying net profit was up 14% YoY to S$1.35 billion, driven mainly by regional associates Airtel and AIS, and operating companies NCS and Optus.
On the capital management front, Singtel’s net debt was down to S$8.7 billion, mainly from the divestment of a 1.2% stake in Airtel.
Cash balance stood at S$3.4 billion with close to 90% of its debts hedged at fixed rates and all foreign currency debt is hedged.
Meanwhile, Singtel generated S$3.7 billion worth of free cash flow, of which S$1.4 billion were from operating activities, plus capital recycling proceeds of S$2.3 billion.
With better financial performance, Singtel increased its interim dividend by 17% YoY to S$0.082.
With the current share price of S$4.53, its trailing 12-month dividend yield is 4%.
Looking ahead, Singtel will be looking to strengthen its core telecom operations in both Singapore and Australia.
On the regional associates, Singtel foresees a brighter outlook given that Airtel has witnessed robust growth in home broadband & potential further pricing uplift and early signs of market recovery for Telkomsel.
Sheng Siong Group (SGX: OV8) – Major Supermarket Chain in Singapore
With 85 outlets across Singapore, Sheng Siong provides essential grocery services to consumers, which includes a wide range of live, fresh and chilled produce, and general merchandise such as toiletries and household products.
Given the resilient nature of essential services and the various handouts and vouchers by the government over the past year, this has created stable consumer demand amidst risk of impending economic slowdown in 2026.
With their heartland locations and competitive pricing, it makes Sheng Siong’s business model even more appealing to value-focused consumers here in Singapore.
In the latest 3Q2025 result, Sheng Siong posted a revenue growth of 14.4% YoY to S$415.5 million, driven by higher store count growth.
In addition, the higher comparable same store sales also helped to grow its topline in the same period.
Sheng Siong has also done well in the margin segment, with gross profit margin improved by 0.2 percentage points to 31.5%, mainly due to improvement in sales mix while navigating rising business operation costs.
As a result, the company’s net profit after tax rose 12.0% YoY to S$43.8 million for 3Q2025.
Looking ahead, Sheng Siong expects the upcoming new distribution centre and headquarter at Sungei Kadut will help support the company’s continued expansion as the new facility can support the operations of 120 supermarkets.
In terms of store count growth, Sheng Siong is on the lookout for viable retail space in Singapore’s housing estates and targets to open at least three stores per year.
Raffles Medical Group (SGX: BSL) – Key integrated private healthcare provider in Asia
Raffles Medical is one of the leading integrated private healthcare providers in the region, providing a wide range of services from primary and tertiary care to health insurance across Asia.
The structural demand for healthcare, fueled by an aging population, positions Raffles Medical as a defensive play, making it less vulnerable to the anticipated economic downturn in 2026.
In the first half of 2025 (1H2025), Raffles Medical reported a revenue growth of 3.5% YoY to S$378.4 million, driven by stronger contributions from both the hospital services and healthcare services divisions.
Despite the losses from its China operations and insurance business, Raffles Medical’s profit after tax was up 5% YoY to S$32.5 million.
On the cash flow front, Raffles Medical generated S$56.6 million in operating cash flow in 1H2025 and paid out a dividend amount totalling S$46.3 million in April 2025.
With that, Raffles Medical revised its dividend policy in February 2025 to distribute at least 50% sustainable earnings annually and a share buy back program of up to 100 million shares over the next two years.
These latest initiatives are supported by a strong balance sheet with S$334.2 million in cash and cash equivalents as of 30 June 2025.
Looking ahead, Raffles Medical expects the healthcare sector to remain a resilient, non-cyclical pillar of the economy, with performance underpinned by steady healthcare requirements and long-term structural growth drivers.
Building a Defensive Portfolio the Smart Way
In short, defence is not about steering clear away from growth, but managing investors’ downside risk.
Some of these defensive traits revolve around essential services, consumer staples and healthcare services for balance.
In the long run, defensive stocks can help to anchor an investor’s portfolio while allowing them to look towards selective growth exposure elsewhere.
Get Smart: Defensive is not bad after all
In times of uncertainties, capital preservation is the key priority as much as looking at sizable returns.
Companies such as Singtel, Sheng Siong, and Raffles Medical offer stability, cash flow and resilience for investors.
A well-defended portfolio gives investors staying power in the market for long-term compounding.
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Disclosure: Daniel does not own shares in any of the companies mentioned.
