The Monetary Authority of Singapore’s (MAS) Equity Market Development Plan is set to significantly impact the Singapore Exchange (SGX) by potentially deploying $3.7bn (S$5bn) into small and mid-cap stocks (SMIDs). This move is expected to boost valuations and attract institutional mandates, according to a report by Thilan Wickramasinghe, Head of Research at Maybank Securities Singapore.
The plan aims to enhance the attractiveness of companies with strong corporate governance (CG) credentials, which are likely to receive a larger share of the investments. This strategic focus on CG is anticipated to drive more sustainable growth and investor confidence in the market.
Eighteen companies have been identified as potential beneficiaries of this initiative. These include AEM, NANO, CENT, UMSH, CSE, FRKN, CD, FR, SPOST, GGR, SSG, SATS, IFAST, YZJFH, SIE, FEH, STH, and RSTON. These firms are expected to see a valuation uplift as a result of increased investment flows.
The MAS initiative is part of a broader effort to revitalise the Singapore equity market, making it more competitive and appealing to global investors. By focusing on SMIDs, the plan seeks to diversify investment opportunities and stimulate economic growth.
In conclusion, the MAS Equity Market Development Plan is poised to transform the landscape of the Singapore equity market by injecting substantial capital into SMIDs, thereby enhancing their valuations and attracting more institutional investors. This move underscores Singapore’s commitment to fostering a robust and dynamic financial market.
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