Why Defence Matters in 2026
Despite moderating inflation and anticipated central bank rate cuts, the global economic landscape for 2026 is fraught with uncertainty.
Market volatility is primarily fueled by persistent geopolitical friction, uneven economic expansion worldwide, and fluctuating expectations for interest rates.
In this environment of unpredictability, investors are advised to consider defensive stocks, which can provide a buffer for their portfolios through reliable earnings and consistent cash flows.
This article highlights three standout defensive stocks listed in Singapore: Singtel, Sheng Siong, and Raffles Medical Group.
Singtel
Singtel is a premier communications technology group with a significant footprint across Asia, Australia, and Africa, serving a vast mobile subscriber base exceeding 800 million across 20 countries.
Its telecommunications services are deemed essential, and its diversified geographic operations cement Singtel's status as a defensive stock for investors.
Management's continuous focus on unlocking value and recycling assets provides confidence in the sustainability of future dividend distributions over the long term.
For the half-year ended 30 September 2025 (1HFY2025), Singtel's operating revenue saw a slight dip of 1.2% year-on-year to S$6.91 billion, attributed to the strength of the Singapore dollar affecting its substantial overseas earnings.
However, underlying net profit climbed 14% YoY to S$1.35 billion, propelled by strong performances from regional associates like Airtel and AIS, as well as operating units NCS and Optus.
The company strengthened its capital position, reducing net debt to S$8.7 billion, largely due to the divestment of a 1.2% stake in Airtel.
Singtel held a cash balance of S$3.4 billion, with nearly 90% of its debt hedged at fixed rates and all foreign currency exposure fully hedged.
Free cash flow generation was robust at S$3.7 billion, comprising S$1.4 billion from operating activities and S$2.3 billion from capital recycling initiatives.
Bolstered by this improved financial health, Singtel raised its interim dividend by 17% YoY to S$0.082 per share.
At the current share price of S$4.53, the stock offers a trailing 12-month dividend yield of 4%.
Going forward, Singtel aims to reinforce its core telecom operations in Singapore and Australia.
The outlook for its regional associates appears promising, with Airtel showing vigorous growth in home broadband and potential for price increases, alongside early indicators of market recovery for Telkomsel.
Sheng Siong
Operating 85 stores throughout Singapore, Sheng Siong delivers essential grocery services, offering a comprehensive selection of live, fresh, and chilled products, alongside general merchandise such as toiletries and household items.
The non-discretionary nature of its business, combined with various government handouts and vouchers distributed over the past year, underpins stable consumer demand, even as economic headwinds loom in 2026.
Its strategic locations in heartland areas and competitive pricing strategy make Sheng Siong's business model particularly attractive to cost-conscious consumers in Singapore.
For the third quarter of 2025 (3Q2025), the company reported a 14.4% YoY revenue increase to S$415.5 million, driven by an expansion in its store network.
Growth was further supported by an uptick in comparable same-store sales during the period.
Sheng Siong also demonstrated margin improvement, with its gross profit margin rising by 0.2 percentage points to 31.5%, achieved through an optimized sales mix despite rising operational costs.
Consequently, net profit after tax for 3Q2025 grew by 12.0% YoY to S$43.8 million.
The upcoming new distribution centre and headquarters in Sungei Kadut are expected to facilitate continued expansion, with the new facility capable of supporting up to 120 supermarkets.
Regarding store growth, Sheng Siong remains actively seeking viable retail spaces within Singapore's housing estates, targeting a minimum of three new store openings annually.
Raffles Medical
Raffles Medical stands as a leading integrated private healthcare provider in the region, offering a broad spectrum of services from primary and tertiary care to health insurance across Asia.
Structural demand for healthcare, accelerated by an aging demographic, solidifies Raffles Medical's defensive characteristics, insulating it from potential economic weakness in 2026.
In the first half of 2025 (1H2025), the group's revenue increased by 3.5% YoY to S$378.4 million, fueled by stronger performances in both its hospital services and healthcare services divisions.
Despite incurring losses from its operations in China and its insurance segment, Raffles Medical's profit after tax rose 5% YoY to S$32.5 million.
The company generated a healthy S$56.6 million in operating cash flow during 1H2025 and distributed dividends totalling S$46.3 million in April 2025.
In February 2025, Raffles Medical revised its dividend policy, committing to distribute at least 50% of sustainable earnings annually, alongside a share buyback program of up to 100 million shares over the next two years.
These shareholder-friendly initiatives are backed by a solid balance sheet, which held S$334.2 million in cash and cash equivalents as of 30 June 2025.
The healthcare sector is anticipated to remain a resilient, non-cyclical economic pillar, supported by steady demand and long-term structural growth drivers.
Building a Defensive Portfolio the Smart Way
In essence, a defensive strategy is not about avoiding growth but about prudently managing downside risk.
Key defensive qualities often include providing essential services, consumer staples, and healthcare, offering a balanced approach to portfolio construction.
Over the long term, defensive stocks can serve as a stable anchor for an investment portfolio, allowing investors to selectively pursue growth opportunities in other areas.
During periods of uncertainty, preserving capital becomes as critical a priority as achieving substantial returns.
Firms like Singtel, Sheng Siong, and Raffles Medical offer investors the trifecta of stability, dependable cash flow, and operational resilience.
A well-defended portfolio equips investors with the endurance needed to benefit from long-term compounding in the markets.
