Institutional investors have shifted their focus towards small- and mid-capitalisation (SMID) stocks, which recorded a net inflow of S$113m last week, even as the market experienced a significant net outflow of nearly S$900m, primarily driven by the three major STI banks. AEM Holdings led the inflow with S$61m, followed by Venture Corporation, UMS Integration, Q&M Dental, and DFI Retail Group.
The technology sector was a major beneficiary, accounting for close to 70% of the inflow value, with AEM Holdings alone representing more than half of the total. However, the buying extended beyond technology, encompassing industrial, consumer, healthcare, and real estate stocks.
Among the 93 SMID stocks that attracted net institutional inflow, 35 had both LSEG Workspace earnings per share (EPS) forecasts and a one-year return on equity (ROE) history. Thirteen of these stocks, which combined positive current and next fiscal year EPS growth with higher ROE than at 30 June 2025, recorded a median net institutional inflow of 6.1 basis points of market capitalisation, compared to 1.9 basis points for the remaining 22 stocks.
The STI’s 4.1% decline last week was largely due to financials, as higher global Treasury yields prompted portfolio rebalancing. Despite this, the 93 SMID stocks with net inflows averaged only a 0.5% decline, indicating selective institutional interest beyond the index heavyweights. This trend highlights a strategic shift in investment focus amidst fluctuating market conditions.
