Chart of the Day: Take a look at the surge in Singapore’s health spending

It could double by 2025.

Secular trends such as an aging population and better health awareness will underpin demand for higher quality healthcare services and products.

According to independent research firm Business Monitor International, Singapore’s health spending is forecasted to grow at a CAGR of 8.8% from $17.8b in 2013 to $32b in 2020. Healthcare companies have thus continued their expansion plans to leverage on this positive long-term outlook. IHH announced on 12 Sep that it had entered into a Sale and Purchase Agreement to acquire a 100% equity stake in Radlink-Asia from Fortis Healthcare Singapore for a sum of $137m. Radlink-Asia is involved in the provision of outpatient diagnostic and molecular imaging services in Singapore.

China’s recent decision to allow full foreign ownership of hospitals in seven cities would benefit RMG’s plans to expand further in China. Notwithstanding the robust secular fundamentals, we believe near-term risks to the sector include an outbreak of the Ebola pandemic, softening medical tourism receipts given the strong Singapore dollar and weaker economic growth in the region.