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      We are pleased to share with you the second edition of our quarterly KPMG Financial Performance Index (FPI) publication. This publication provides insights into the changing state of corporate health across all companies listed and headquarter in Singapore across all sectors, following the end of the reporting season for the three months to June 2024. KPMG FPI data is refreshed on a quarterly basis. For more information, visit the KPMG FPI page.

      From March to June 2024, Singapore’s financial corporate health showed a slight improvement with FPI scores rising from 81.9 to 84.1. Out of the 18 sectors assessed, notable gains were seen in Technology and Telecommunication (51.8 to 78.0), Trading Companies & Distributors (53.8 to 70.1), and Financial Services (85.7 to 96.3) by the end of June 2024. Conversely, the Manufacturing (80.2 to 64.8) and Energy (91.6 to 78.2) sectors declined.

      Singapore FPI performance comparison

      KPMG Financial Performance Index (KPMG FPI Singapore) analysed across:

      • Singapore's economic forecast for 2024 remains optimistic, bolstered by vigorous domestic demand, sustained foreign direct investments, and thriving international tourism.
      • Year-on-year comparison (2Q23 to 2Q24) shows that Technology and Telecommunications, along with Business Services, were the top performers, growing by 50.4% and 50.36%, respectively. This growth was fueled by higher demand for imported goods during economic recovery and rising demand for sustainability-focused consulting and digital transformation services in sectors like healthcare and defense.
      • Over the past six months, Manufacturing and Healthcare sectors saw notable decline of 21.9% and 16.6%, respectively. This decline was largely due to Singapore's heavy reliance on semiconductor and high-tech industries, which suffered from weak global demand. Additionally, global economic challenges, including inflation and changes in financing markets impacted investments in healthcare innovation and infrastructure.
      • When compared to global and regional index, Singapore's KPMG FPI score of 84.2 still lags behind Asian of 89.4 and global of 87.4 which indicates a moderate gap in upward momentum in 2Q24.

      Historic FPI movement of Singapore with respect to Asia and Global trends

      Historic FPI movement of Singapore with respect to India, Japan, China, Indonesia, and US

      Sector movers

      • The FPI scores for Singapore was majorly driven by Technology and Telecommunications sector, which saw more than 50.7% rise in 2Q24 when compared to 1Q24. The rise was mainly driven by growth witnessed in the overall Singaporean economy and IMF predictions validated the same with steady 2.5% annual growth from 2023 to 2028. This growth is expected to increase demand for skilled talent workforce in the Technology and Telecommunications sector.
      • This growth is also driven by government’s increased focus on digital transformation and innovation with allocation of S$1 billion into AI over the next five years, plans of upgradation of the nationwide broadband network, and international collaborations and partnerships investment for development of AI CoEs in Singapore.
      • Further, sectors including Trading Companies and Distributors and Financial Services also observed robust growth of 30.3% and 12.4%, respectively. A similar trend was seen among the associated sub-sectors such as Diversified Financials and Other Services observing a rise of 6.1%.
      • Manufacturing, Energy and Healthcare sector witnessed prominent decline in FPI scores, dropping by 19.3%, 14.6% and 8.6% respectively. Year-on-year, Consumer Markets, Energy and Media and Entertainment sectors recorded major declines in FPI scores and dropped by 12.6%, 11.7% and 6.1% respectively. Energy sector in Singapore has witnessed prominent declines since 2Q23.  
      • In the sub-sector analysis, Advertising (Media and Entertainment) scored lowest at 37.7, followed by Real Estate Services (Infrastructure and Real Estate) at 43.6, and Electrical Equipment (Manufacturing) at 44.5. Additionally, Advertising saw the largest quarter-over-quarter decline at 51.3%, followed by Electrical Equipment at 45.0%, and Semiconductor & Semiconductor Equipment at 24.6%.
      • Notably, Financial Services led as Singapore’s top sector from 1Q24 to 2Q24, showing a robust 12.4% quarter-over-quarter growth.

      From March 2024 to June 2024

      Strongest and weakest sector outperformers

      From March 2024 to June 2024

      Strongest and weakest sector outperformers

      Singapore economy and landscape

      • Singapore's GDP growth is projected to grow between 2% to 3% in 2024, following 1.1% growth in 2023. This forecast is based on optimistic global macroeconomic environment anticipated for 2H24 alongside continuous recovery in global demand for electronics and tourism.
      • Sectors comprising the information and communications, finance and insurance and professional services sectors recorded the biggest GDP growth of 5.6% in 2Q24, supported by continued strong demand for IT and digital solutions and growth in banking and fund management segments. The FPI index for last 6 months (4Q23 vs 2Q24) was in line with broader economic trend with IT and Other Services, Technology Distributors and Research and Consulting Services being the top sectors witnessing strong growth.
      • The travel-centric segment and consumer-focused domestic services are expected to see growth in 2024, driven by the continuing revival of international travel and gradual disinflation. In the last quarter, the FPI index also showed gains in sectors like Food and Beverage. Travel and Hospitality have consistently maintained a robust FPI score above 90 for over ten consecutive quarters.
      • The manufacturing and trade-related sectors are expected to see a gradual recovery during the year. Within the manufacturing sector, the electronics cluster is projected to recover gradually in the coming quarters, supported by demand for semiconductors for end-markets such as smartphones, PCs and AI. Growth in the electronics cluster will in turn have positive spillover effects on the precision engineering cluster, as well as the machinery, equipment & supplies segment of the wholesale trade sector.

      Zombies

      • Zombies are defined as companies close to default (scoring 0 on the KPMG FPI) for three or more consecutive quarters. These businesses might already be facing challenges or implementing restructuring plans.
      • In Asia, the count of zombies has grown each quarter, rising from 171 in 1Q24 to 194 in 2Q24. The leading sectors with the most significant shares of zombies are Infrastructure and Real Estate at 20.6%, followed by Technology and Telecommunications at 13.9%, and Consumer Markets at 12.9%.
      • Singapore’s count of zombies similarly increased from 5 to 7 in 2Q24. Sectors reporting zombies are Technology and Telecommunication (3), Infrastructure and Real Estate (2), Trading Companies and Distributors (1) and Media and Entertainment (1).
      Trends of Zombies in the KPMG FPI

      About KPMG FPI

      The KPMG Financial Performance Index measures the financial health of individual companies. Based on an initial pool of more than 40,000 companies globally, KPMG FPI identifies those companies, sectors, regions, countries, and territories that are performing well and those that are underperforming. A higher score on the KPMG FPI represents strong performance.

      The KPMG FPI model draws from the Logit Probability to Financial Default model (developed by John Campbell, Jens Hilscher and Jan Szilagyi), which is based on eight explanatory variables encompassing financial and market variables, to arrive at the overall financial health of a company. The KPMG FPI is based on raw data from S&P Capital IQ database.

      How we can help

      To understand your company’s current index score, or to uncover deeper insights about specific markets or segments, contact us today. KPMG’s global network of professionals have the data, sector, and geographic expertise to help you understand your score and tie it back to your business needs. Whether it is benchmarking, identifying targets, comparing sectors, or looking for trends over time, KPMG professionals can connect you to the information you need to capitalise on your opportunities.

      Our Insights

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      Toh Ai Ling
      Toh Ai Ling

      Partner, Head of Turnaround and Restructuring

      KPMG in Singapore

      Adrian Chan
      Adrian Chan

      Partner, Turnaround and Restructuring, Deal Advisory

      KPMG in Singapore

      Tan Yen Chiaw

      Partner, Turnaround and Restructuring, Deal Advisory

      KPMG in Singapore

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