Top 5 defensive stocks in Singapore: Stable companies for volatile markets

What are defensive stocks?

Many traders look for stability when markets turn volatile. Defensive stocks offer exactly that, providing a buffer against market uncertainty through their unique business qualities. Understanding what makes these stocks "defensive" can help traders identify strong candidates for more resilient portfolios.

What makes a stock "defensive"?

Let's clear up a common confusion right away - defensive stocks have nothing to do with military defence or weapons manufacturers. The term "defensive" refers to their financial characteristics, not their industry.

These stocks are shares in companies that provide essential goods and services that people need regardless of economic conditions. Think everyday necessities like food, electricity, healthcare and telecommunications. These companies maintain steady business even during economic downturns because people continue to use their products and services.

Key characteristics of defensive stocks

The term "defensive" comes from how these stocks help defend your investment portfolio during market turbulence - they typically maintain more stable performance when markets get rocky. This defensive quality comes from their:

• Steady, predictable demand for essential products/services
• Consistent revenue streams regardless of economic conditions
• Typically lower volatility compared to growth stocks
• Generally reliable dividend payments

Singapore's defensive stock landscape offers several strong options across key sectors. These companies provide essential services that people need in both good times and challenging economic periods.

Balancing stability with trade-offs

While defensive stocks provide crucial portfolio stability, they come with certain limitations. Their growth potential typically falls below what you might see from technology or other growth stocks. They also tend to react negatively when interest rates rise, as their dividend yields become less attractive compared to fixed-income investments.

Despite these considerations, defensive stocks serve as valuable portfolio components. During market turbulence, while other investments might struggle, these stocks often maintain their ground, providing both stability and often continued dividend income.

Why defensive stocks shine when markets tumble

Standard investment wisdom tends to glorify high-growth stocks that make headlines. But in Singapore's sometimes volatile market, defensive stocks often prove to be the unsung heroes of savvy portfolios.

1. Cash flow champions in uncertain times

When tech stocks declined sharply during the 10.7% market correction in April 2025, Singapore's defensive companies maintained their consistent dividend payments.

What makes this powerful:

• Singapore's top defensive picks offer yields between 3.6-5.2%¹ in 2025, significantly higher than the STI's average
• Singtel's 5.2% dividend yield has shown notable resilience through market fluctuations²
• These dividend payments continue regardless of share price movements
• Particularly valuable during retirement or when steady income is needed

Singapore's one-tier tax system makes these dividend streams especially valuable - you get your full dividend without additional tax burdens, unlike interest income from bonds or fixed deposits³.

2. The "sleep well" advantage

Perhaps the most underrated benefit of defensive stocks is something you can't measure on a balance sheet: peace of mind.

Recent proof:

• During April's market correction when the STI dropped 10.7%, telecom sector stocks actually rose 6.8% while utilities gained around 4%⁴
• DBS showed greater stability during this period compared to more volatile tech stocks
• Sembcorp's regulated revenue model provides predictability that other investments lack

This stability means less time worrying about market fluctuations and more time focusing on your broader financial plans - an advantage rarely discussed in financial literature but valuable for investors.

3. Singapore's unique defensive edge

Singapore's defensive stocks benefit from structural advantages compared to their global counterparts.

What sets Singapore's defensive plays apart:

• Robust regulatory frameworks enhance stability for essential service providers
• Companies with government connections (like Singtel) often maintain strategic positions
• Geographic diversification as many Singapore companies operate across Southeast Asia
• Demonstrated resilience through various regional economic challenges

This Singapore advantage was evident during recent market volatility, with its defensive sectors showing stronger stability compared to regional alternatives.⁵

4. The contrarian's strategic advantage

While many investors react emotionally during market uncertainty, strategic traders often take a different approach - and Singapore's defensive stocks can provide opportunities during market fluctuations.

Strategic advantages:

• Defensive stocks typically experience smaller declines, preserving more capital for future opportunities
• Consistent dividends can be reinvested at potentially favourable prices during market corrections
• Lower volatility metrics (beta values below 1.0)⁶ often mean less price recovery needed to regain previous positions
• Provides a more measured foundation for decision-making during market uncertainty

Given Singapore's reputation for stability during regional economic fluctuations, these stocks can contribute significantly to portfolio resilience.

Top 5 defensive stocks to watch in Singapore⁷

1. Singtel (Stock symbol - SGX: Z74)

Industry

Telecommunications

What makes it defensive

• Essential connectivity services
• Stable subscription-based revenue model
• Diversified across multiple markets
• Strong infrastructure advantages

2025 performance metrics⁸

• Share price: S$3.80
• Year-to-date (YTD) performance: +30%
• Dividend yield: 5.2% (annual income as percentage of current share price)
• Market capitalisation (total company value): S$47.5 billion

Why traders are watching it

Singtel reported S$1.32 billion net profit for Q3 FY2025, showing significant growth amid market volatility.⁹ Its Southeast Asian telecommunications network continues expanding with investments in digital technologies and data centres. This combines essential services stability with growth potential.

Best suited for

This stock may appeal to income-focused investors interested in dividend stability with growth potential.

2. DBS Group (Stock symbol - SGX: D05)

Industry

Banking and finance

What makes it defensive

• Essential financial services provider
• Strong capital position
• Consistently high dividend yields
• Diversified revenue streams
• "Asia's Safest Bank" for 16 consecutive years (Global Finance, 2009-2024)¹⁰

2025 performance metrics¹¹

• Share price: S$43.56
• Year-to-date performance: +43.44% (percentage increase since January 1)
• Dividend yield: ~4.4% (annual income as percentage of share price)
• Market capitalisation (total company value): S$125.87 billion

Why traders are watching it

DBS Group reported a record S$11.4 billion net profit in 2024 (11% year-on-year increase) and plans a new quarterly Capital Return dividend for 2025.¹² Despite not being a traditional defensive stock, its resilience during market volatility and strong risk management make it stand out in Singapore's financial sector.

Best suited for

This stock may appeal to investors interested in financial sector exposure with reduced cyclical risk and dividend income.

3. Wilmar International (Stock symbol - SGX: F34)

Industry

Consumer staples

What makes it defensive

• Provides essential food products
• Vertically integrated supply chain
• Geographic diversification
• Strong positions in staple commodities

2025 performance metrics¹³

• Share price: S$3.13
• Year-to-date performance: +2.05% (percentage increase since January 1)
• Dividend yield: 5.19% (annual income as percentage of share price)
• Price-to-earnings (P/E) ratio: 10.09 (share price divided by annual earnings per share)

Why traders are watching it

Wilmar International's net profit is forecast to grow 12.1% annually according to analyst projections^.14 The company's vertically integrated food production model and operations across China, India, Indonesia and other Asian markets provide geographic diversification that remains in demand regardless of economic conditions.

Best suited for

This stock may appeal to investors interested in consumer staples exposure with emerging market growth potential and dividend income.

4. Sembcorp Industries (Stock symbol - SGX: U96)

Industry

Utilities

What makes it defensive

• Essential utilities provider
• Contracted revenue streams
• Critical infrastructure assets
• Stable government relationships
• Growing renewable energy portfolio

2025 performance metrics¹⁵

• Share price: S$6.34
• Year-to-date performance: +8.8% (percentage increase since January 1)
• Dividend yield: 3.63% (annual income as percentage of share price)
• Price-to-earnings (P/E) ratio: ~10x (share price divided by annual earnings per share)

Why traders are watching it

Sembcorp Industries reported S$1.01 billion net profit for FY2024 (7% increase from FY2023) and has expanded its renewable energy capacity to 17.0GW by early 2025.¹⁶ As a critical infrastructure provider with predictable revenue streams, the company's pivot toward renewable energy adds growth potential to its essential-service foundation.

Best suited for

This stock may appeal to investors interested in utilities exposure with environmental sustainability aspects.

5. Raffles Medical Group (Stock symbol - SGX: BSL)

Industry

Healthcare

What makes it defensive

• Essential healthcare services
• Growing regional presence
• Resilient during economic downturns
• Digital healthcare innovations
• Expanding revenue streams

2025 performance metrics¹⁷

• Share price: S$1.00
• Year-to-date performance: +22.99% (percentage increase since January 1)
• Dividend yield: 2.50% (annual income as percentage of share price)
• Recent dividend increase: 4.2% over 2024

Why traders are watching it

Raffles Medical Group has seen 23% year-to-date stock growth and trades significantly above its 200-day moving average.¹⁸ The company operates an expanding healthcare ecosystem across Singapore, China, Japan, Vietnam and Cambodia. Its focus on technological integration and specialist services maintains growth potential while providing essential healthcare services.

Best suited for

This stock may appeal to investors interested in healthcare exposure with connections to China's medical market.

How to trade defensive stocks with IG Singapore

Here's how to get started with defensive stocks trading through IG Singapore. Note that stock availability may vary, so check the platform for current trading options on specific stocks.

1. Choose your trading approach
 

CFDs

• Trade on margin with a small deposit
• Go long (rising prices) or short (falling prices)
• Use leverage to magnify outcomes
• Set guaranteed stops to limit potential losses

Direct market access (DMA)

• Trade directly on the exchange order book
• Access to full market depth
• Greater transparency for longer-term positions

2. Understand the risks thoroughly

Even defensive stocks carry significant risks that traders should carefully consider.

Market risks

• Interest rate fluctuations can particularly impact high-yield defensive stocks
• Regulatory changes may affect essential services sectors (utilities, telecommunications, healthcare)
• Economic downturns can still impact even the most stable companies
• Sector-specific challenges like technological disruption can affect long-term viability

Trading-specific risks

• CFD trading involves leverage, which can magnify both gains and losses
• Potential to lose more than your initial deposit when using leverage
• Liquidity constraints may affect entry and exit prices for some Singapore stocks
• Gap risk where prices move significantly between market close and open
• Currency risk for international traders due to SGD fluctuations

Always employ appropriate risk management strategies including position sizing, stop-loss orders and portfolio diversification to protect your capital.

3. Start trading
 

1. Log in or create an IG account
2. Find Singapore defensive stocks using the search tool
3. Set sensible position sizes based on your risk comfort
4. Consider spreading trades across different defensive sectors
5. Look for potential entry opportunities during calmer market periods

Footnotes

_{¹ Dividend yield data sourced from Singapore Exchange (SGX) market data, May 2025.}

_{² https://sginvestors.io/analysts/research/2025/01/singtel-uob-kay-hian-research-2025-01-21}

_{³ https://www.iras.gov.sg/taxes/individual-income-tax/basics-of-individual-income-tax/what-is-taxable-what-is-not/dividends}

_{⁴ Based on SGX sector performance data during the April 2025 market correction following US tariff announcements, when the STI declined 10.7% while defensive sectors showed significantly less volatility. Source: Reuters, "Singapore's high-yield stocks gain from tariff-induced flight to safety," April 24, 2025.}

_{⁵ Historical performance analysis of Singapore market sectors during 2020-2025 economic cycles, as documented by DBS Research in their "Singapore Equity Picks" report, April 2025.}

_{⁶ Beta values calculated based on 3-year correlation with Straits Times Index (STI), as reported in DBS Stock Pulse, April 8, 2025.}

_{⁷ The following information is correct as of 7 May 2025}

_{⁸ Correct as of 26 May 2025}

_{⁹ Singtel Q3 FY2025 Financial Results, released February 2025.}

_{¹⁰ DBS "Safest Bank in Asia" recognition by Global Finance for 16 consecutive years (2009-2024), as announced in DBS press release, October 18, 2024.}

_{¹¹ Correct as of 1 April 2025}

_{¹² DBS "Safest Bank in Asia" recognition by Global Finance for 16 consecutive years (2009-2024), as announced in DBS press release, October 18, 2024.}

_{¹³ Correct as of 25 April 2025}

_{¹⁴ Wilmar International's 12.1% per annum growth forecast from SimplyWall.st analyst consensus, May 2025, based on data from 12 analysts covering the company.}

_{¹⁵ Correct as of 26 May 2025}

_{¹⁶ Sembcorp Industries FY2024 Annual Report and the "Weekly Market Review with SIAS" by Growbeansprout.com, April 1, 2025, which confirms the 17GW renewable energy capacity.}

_{¹⁷ Correct as of 23 May 2025}

_{¹⁸ Raffles Medical Group performance data and regional expansion announcements, Q1 2025.}