Singapore’s small-mid cap stocks are set to receive a substantial boost following the Monetary Authority of Singapore’s (MAS) $5bn Equity Market Development Programme (EQDP). Announced on 21 February 2025, the EQDP aims to enhance the local asset management and research ecosystem, increasing investor interest in Singapore’s equities market. The first allocation of $1.1bn has been made to asset managers Avanda, Fullerton, and JP Morgan Asset Management, with further allocations expected in late 2025 and 2026.
The EQDP positions small-mid caps as a key focus, supported by targeted policies, and is expected to attract capital beyond the initial $5bn seed fund. This market segment, comprising 205 stocks with market caps between SGD100mn and SGD3bn, offers a broader opportunity set compared to the Straits Times Index’s (STI) 30 stocks. Notable potential beneficiaries include ComfortDelGro, GuocoLand, and Raffles Medical, among others.
DBS Group Research highlights the potential for small-mid caps to outperform large caps, citing attractive valuations and improved investor sentiment. The average month-to-date gain of 11.9% among 58 non-index stocks under DBS’s coverage surpasses the STI’s 7.5% increase. “The EQDP sends a strong signal to the market that small-mid caps are no longer an afterthought,” stated DBS analysts.
With the EQDP’s liquidity injection and favourable valuations, small-mid caps are poised for continued growth, offering investors the potential for market-beating returns. As the programme progresses, it is expected to channel significant liquidity into the Singapore equities market, enhancing overall market liquidity and capitalisation.
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