The Monetary Authority of Singapore (MAS) is set to launch a S$5b Equity Market Development Programme (EMDP) to bolster liquidity in Singapore’s mid-cap stocks. This initiative, expected to commence in the coming months, targets stocks with a market capitalisation between S$0.5b and S$3b, focusing on those with an average daily trading volume (ADTV) exceeding S$2m.
The EMDP is designed to enhance market liquidity and support Singapore’s fund management ecosystem. The funds will be allocated from MAS’s investment portfolio and the Financial Sector Development Fund, with deployment anticipated as early as the fourth quarter of 2025. The programme prioritises non-index stocks and actively managed strategies, excluding Real Estate Investment Trusts (REITs).
UOBKayHian identified 16 stocks meeting the high liquidity threshold, including Centurion Corp, ComfortDelGro, and iFAST. These stocks were selected based on criteria such as past earnings growth, return on equity, and price-to-earnings valuations. Notably, iFAST is highlighted for its record-high assets under administration and projected strong earnings growth.
Lowering the ADTV threshold to S$1m expands the pool of attractive stocks by nine, with Hong Leong Asia and Food Empire standing out for their earnings growth and robust balance sheets.
The initiative is expected to increase trading velocity and turnover, enabling investors to rebalance portfolios, meet redemptions, and manage risks effectively. The Straits Times Index (STI) is forecast to reach 4,054 by the end of 2025, reflecting a 2.2% upside from current levels, supported by a 1.2% earnings growth forecast for index stocks.
In conclusion, MAS’s EMDP is poised to significantly impact Singapore’s mid-cap market, enhancing liquidity and providing new opportunities for investors.
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