- With the MAS’s S$5b Equity Market Development Program (EQDP) potentially starting in the next few months, we have taken a top-down approach to screen for mid-cap stocks (market capitalisation of S$0.5b-3.0b) that could interest qualified institutional fund managers using a number of criteria.
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A relatively high bar for liquidity in the Singapore context.
- At an average daily trading value of S$2m we have provided for a somewhat high bar for liquidity, in our view. Nevertheless, as funds are deployed, we envisage that turnover and trading velocity in these stocks (as well as other mid-caps) should increase in the near to medium term. This will therefore allow investors to rebalance or seize opportunities, meet redemptions, manage risk and keep within regulatory and mandate compliance.
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- net cash to market capitalisation, ROE,
- free float percentage and
- P/E valuations of less than 15x and
- yield of above 3% in the past 5 years.
The 16 stocks that make the cut:
- Of the 16 stocks, we cover 11 of them.
- Centurion (SGX:OU8) – Inelastic demand for its assets; construction spending tailwinds in Singapore.
- ComfortDelGro (SGX:C52) – Forecast 11% EPS CAGR over 2024-27F; margin expansion in UK.
- First Resources (SGX:EB5) – Production growth guidance of 5% y-o-y for 2025; potential for improved downstream contribution from expanded production capacity.
- iFAST (SGX:AIY) – Record-high assets under administration (AUA); strong projected 26.4% earnings CAGR from 2025-27F.
- NetLink Trust (SGX:CJLU) – Sustainable earnings for 2025-27F; healthy balance sheet; projected 2025 yield of 6%.
- Raffles Medical (SGX:BSL) – Operationally resilient with a healthy cash balance.
- Riverstone (SGX:AP4) – Potential recovery in cleanroom glove segment in 2H25.
- Sheng Siong (SGX:OV8) – Volume growth via six new openings in 2025; strong management.
- SIA Engineering (SGX:S59) – Strong net cash position; strong MRO demand with limited impact from tariff war, contract renewal completed with SIA should alleviate margin pressure.
- SingPost (SGX:S08) – Special dividends to be paid out as asset sales continue.
- UMS (SGX:558) – Healthy orders from new customer; 10% q-o-q revenue growth guidance for 2Q25; dual listing on track for late Jul 25.
- Our top three picks being iFAST, Centurion and SingPost.
- We caution however that SingPost is in the middle of an asset sale that could see it being whittled down to only a postal services company. In its place, we highlight UMS instead due to our forecast for strong earnings growth vs its peers as well as its upcoming dual listing in Malaysia.
- We also like Sheng Siong for its resilient earnings growth and a record number of store openings in 2025, ComfortDelGro for its forecasted strong earnings growth in 2025 from M&A and margin expansion from its UK operations, while NetLink Trust should benefit from lower interest rates.
- (The remaining 5 stocks include Jardine Cycle & Carriage (SGX:C07), Olam (SGX:VC2), CapitaLand India Trust (SGX:CY6U), Keppel Infra Trust (SGX:A7RU), Yangzijiang Financial (SGX:YF8).)
Lowering our ADTV threshold to S$1m increases the universe of attractive stocks by 9.
- Read more at SGinvestors.io.
