Dear readers, in a major move to revitalize the Singapore stock market and attract both institutional and retail investor interest, the Monetary Authority of Singapore (MAS) has kickstarted a bold initiative under the Equity Market Development (EMD) Programme.
A significant $1.1 billion equity injection has been committed to boost trading liquidity and valuations of listed companies—particularly those in the small- and mid-cap segment.
As part of this initiative, MAS has appointed three seasoned fund managers to oversee the deployment of capital:
- Avanda Investment Management
- Fullerton Fund Management
- J.P. Morgan Asset Management
This move signals a strong, coordinated push to deepen Singapore’s capital markets and drive broader investor engagement. But what’s even more encouraging is that overseas investors—completely independent of this government-led initiative—are also increasing their stakes in Singapore-listed companies. Together, this confluence of public and private capital inflow may just mark the beginning of a golden age for Singapore equities.
The MAS Equity Market Development Programme: A Quick Recap
The Equity Market Development Programme is not merely about short-term price support. Instead, it reflects a larger strategic vision: to transform Singapore into Asia’s premier hub for equity financing, innovation, and long-term capital growth.
By injecting $1.1 billion and assigning experienced fund managers to allocate this capital judiciously, MAS aims to:
- Strengthen investor confidence
- Improve liquidity and valuations of under-researched small and mid-cap stocks
- Attract more IPOs to list in Singapore
- Develop a vibrant ecosystem of fund managers, brokers, and research coverage
More fund managers are expected to be appointed in the coming months, creating a sustainable pipeline of professional capital that actively participates in the SGX.
Global Investors Are Already Bullish on Singapore Equities
While MAS’s initiative is a welcome development, what’s even more noteworthy is the organic global investor interest in Singapore’s undervalued equities.
A prime example of this is the Avantis International Small Cap Value ETF (AVDV). Managed by U.S.-based Avantis Investors, AVDV is a globally diversified fund focusing on small-cap value stocks outside the U.S.
In recent months, AVDV has emerged as a substantial shareholder in Rex International Holdings, a small-cap oil exploration company listed on SGX. The ETF has increased its stake to over 5%—a significant threshold under SGX disclosure rules.
This is not a one-off occurrence. AVDV has quietly built positions in 30 Singapore-listed small and mid-cap companies, reflecting its strong conviction in the long-term potential of local equities.
The 30 SGX Stocks Held by AVDV
Here is a full list of the 30 Singapore companies in which AVDV currently holds positions:
- Yangzijiang Financial Holding
- First Resources
- Samudera Shipping Line
- Wee Hur Holdings
- Rex International Holding
- Hutchison Port Holdings Trust
- Geo Energy Resources
- CSE Global
- Yanlord Land Group
- Keppel Infrastructure Trust
- RH Petrogas
- CNMC Goldmine Holdings
- Aztech Global
- China Sunsine Chemical Holdings
- Hong Leong Asia
- Bumitama Agri
- Food Empire Holdings
- Raffles Medical Group
- ISDN Holdings
- Marco Polo Marine
- LHN Limited
- InnoTek
- The Hour Glass
- Indofood Agri Resources
- QAF
- Banyan Tree Holdings
- Tuan Sing Holdings
- BRC Asia
- Riverstone Holdings
- Hong Fok Corporation
This diversified portfolio includes sectors ranging from energy, real estate, food manufacturing, infrastructure, to healthcare—underscoring AVDV’s comprehensive strategy to tap into Singapore’s undervalued yet resilient economy.
Why Are Global Funds Flocking to Singapore Stocks?
Several reasons explain this growing interest from global investors:
1. Attractive Valuations
Singapore’s stock market, especially the small and mid-cap space, has long been undervalued relative to its regional peers. Many SGX stocks trade below book value, despite strong earnings, dividends, and healthy balance sheets.
2. Strong Dividend Yields
Singapore companies are known for conservative financial management and generous dividend payouts. For yield-hungry investors in today’s low-interest environment, SGX-listed companies offer a compelling alternative.
3. Political and Regulatory Stability
Singapore offers an unparalleled combination of political stability, transparent corporate governance, and a reliable legal framework. These traits are especially appealing to long-term institutional investors.
4. Sector Diversification and Asia Exposure
Singapore-listed companies provide access to key Asian themes—such as maritime trade, regional infrastructure, and consumer growth—without the governance risks often associated with other emerging markets.
5. Currency Strength
The Singapore Dollar (SGD) is one of Asia’s most stable and respected currencies. For USD-based investors, currency risk is relatively low compared to other regional markets.
Amundi Launches STI ETF: Another Vote of Confidence
In another show of confidence, European asset management giant Amundi has launched the Amundi Singapore Straits Times Index Fund. This fund allows investors—especially Singaporeans—to invest directly in a diversified portfolio of large-cap SGX-listed companies that make up the Straits Times Index (STI).
This development is crucial for three reasons:
- It provides a cost-effective and simple way for investors to gain exposure to Singapore’s blue-chip stocks.
- It strengthens passive investing infrastructure in the local market.
- It encourages greater retail participation in the stock market.
Amundi’s entry into the Singapore ETF scene complements the government’s goals under the EMD Programme and signals institutional belief in the SGX’s long-term growth.
Why Small and Mid-Caps Matter to Singapore’s Market Future
While large-cap STI stocks such as DBS, OCBC, and Singtel dominate headlines, the future of the SGX lies in revitalising the small and mid-cap ecosystem.
Here’s why:
- Greater Growth Potential: Many small-cap companies are in expansion mode and can deliver outsized returns compared to mature large-caps.
- Job Creation and Economic Impact: SMEs contribute significantly to employment and innovation in Singapore.
- IPO Pipeline Health: A thriving small-cap ecosystem encourages more private companies to consider SGX as a listing destination.
MAS’s EMD Programme and foreign investor interest are both crucial in supporting liquidity, increasing research coverage, and reducing valuation discounts that have historically plagued this segment.
Challenges That Still Need Addressing
While momentum is clearly building, several long-standing issues must still be addressed to sustain this renewed optimism:
- Limited Analyst Coverage: Many SGX small-caps receive minimal institutional research, limiting investor awareness.
- Low Trading Volumes: Even fundamentally strong companies suffer from poor liquidity, deterring active investors and traders.
- Delisting and Takeover Risks: A number of SGX companies have opted to delist, reducing the vibrancy of the market.
- Retail Investor Engagement: More must be done to promote financial literacy and stock investing among Singaporeans.
Fortunately, these are areas where MAS, SGX, brokers, and fund managers can collaborate for collective improvement.
A Realistic (Yet Optimistic) Dream: STI 10,000?
Singapore’s Straits Times Index (STI) is currently trading above the 4,000 mark, its highest level in over a decade. Some market watchers have begun floating the idea of STI hitting 10,000 in the coming years.
Is that possible?
While such a milestone will require structural shifts—such as more tech listings, higher market liquidity, and stronger global visibility—the building blocks are falling into place:
- Government and institutional support through the EMD Programme
- Rising interest from global funds and ETFs
- A potential wave of quality IPOs
- Growth in investor education and participation
Singapore may never be a market with the explosive growth of the Nasdaq or Shenzhen, but it can evolve into Asia’s most trusted, stable, and yield-friendly equity market.
Conclusion: The Case for Singapore Stocks Has Never Been Stronger
Singapore’s stock market is undergoing a quiet renaissance. Thanks to the Equity Market Development Programme, the support of MAS, and the enthusiastic participation of global investors, SGX is beginning to punch above its weight again.
AVDV’s 30-stock portfolio is proof that there is significant global institutional belief in Singapore’s small-cap potential. The launch of Amundi’s STI fund further solidifies the city-state’s appeal to both passive and active investors.
For everyday investors, this is the time to relook at Singapore equities—whether through ETFs, REITs, blue chips, or hidden gems in the small-cap space. After years of being overlooked, Singapore stocks may be on the verge of a long-overdue breakout.
Let the STI grow—perhaps one day even to 10,000!