- Measures of the MAS' Equity Market Development Program (EQDP) could increase institutional mandates for small-and mid-cap (SMID) stocks on SGX. The potential deployment of S$5bn in to these stocks can give them a significant liquidity and valuation boost, but not all will benefit equally. Shortlisted fund managers under the EQDP program are expected be announced by 3Q25.
- - Read this at SGinvestors.io -
Big liquidity potential, S$5bn can go a long way
- While qualifying criteria are unknown, investment mandates with active management strategies in Singapore equities that focus more on non-index stocks are likely to be preferred.
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- We believe deploying S$5bn to non-index stocks can deliver a significant boost to market liquidity. Indeed, in 2025 year-to-date, 80% of SGX securities market average daily value (ADV) originated from STI components. The rest contributed just S$261m of average daily value. (see chart)
- Hence, the EQDP could potentially boost segment liquidity by 19 times when fully deployed. If matching is required, where qualified fund managers have to proportionately deploy their own capital, there could be a significant multiplier effect, in our view.
Corporate Governance will determine the winners.
- Read more at SGinvestors.io.
