• MAS’s SGD 5 billion initiative aims to increase investor interest and participation in Singapore’s equities market, particularly targeting small- and mid-cap stocks.
• Three appointed managers—Avanda, Fullerton, and JPMorgan—pursue strategies emphasizing local equities, growth, income, and sector diversification.
• Our stock selection framework considers market cap, financial resilience, return on equity, future earnings growth, reasonable valuations, homegrown leader status, and strategic sector alignment.
• Eight potential beneficiaries include ComfortDelGro, Ho Bee Land, PanUnited, Raffles Medical, Sheng Siong, SIA Engineering, UMS and UOB Kay Hian.
What Is the Equity Market Development Programme (EQDP)?
The Equity Market Development Programme (EQDP) is an SGD 5 billion initiative by MAS and the Financial Sector Development Fund to revitalise Singapore’s equity market. It encourages investment beyond large-cap companies, channelling capital into underrepresented segments to make the Singapore Exchange (SGX) more vibrant.
An initial SGD 1.1 billion has been allocated to three asset managers—Avanda Investment Management, Fullerton Fund Management, and JPMorgan Asset Management—selected for their strong track records, ability to attract third-party capital, and commitment to deepen Singapore’s asset management and research capabilities.
Complementing this, MAS has earmarked SGD 50 million to enhance the Grant for Equity Market Singapore (GEMS), further supporting equity research on small- and mid-cap companies and pre-IPO firms.
Through these measures, MAS aims to strengthen the ecosystem—developing local asset management talent, improving research coverage, creating more competitive fund offerings, and growing a broader investor base.
How do fund managers choose which stocks to invest?
Under the EQDP, MAS requires participating strategies to invest predominantly in Singapore-listed equities, with a clear preference for portfolios tilted towards small- and mid-cap companies.
Among the three appointed fund managers, Avanda announced its approach to be fully dedicated to Singapore equities. By taking a highly active, benchmark-agnostic stance, Avanda seeks opportunities beyond Straits Times Index (STI) constituents. Its investment philosophy revolves around three themes—Value-up, Local Champions, and Turnaround—allowing it to target companies with re-rating potential, domestic leadership, or operational recovery stories.
While Fullerton mentioned that they will invest in stocks listed on the SGX with exposure across all market caps, J.P. Morgan mentioned that they would maintain a significant allocation to Singapore equities while also investing selectively in other Asian markets such as Australia, China, and India. The portfolio might be designed with a focus on high-dividend-yielding stocks, while ensuring income is derived from a diversified set of sectors, including REITs, telecommunications, consumer goods, and financial services. This is to ensure that the income is stable regardless of market conditions.
In essence, fund managers under the EQDP select stocks through a combination of mandate alignment, thematic positioning, and sectoral diversification—balancing capital growth opportunities with sustainable income generation.
Who are the potential beneficiaries?
Guided by the objectives of the EQDP, we designed a screening framework to surface potential beneficiaries. These companies demonstrate characteristics that align with MAS’s requirements as well as our evaluation criteria.
Market Capitalisation
We first narrowed our focus to companies with a market capitalisation between SGD 500 million and SGD 5 billion. Small to mid-cap stocks are often overlooked despite offering an attractive combination of characteristics: the operational stability and track record of larger firms, combined with the expansion potential typical of smaller companies. Many have moved beyond their most unpredictable growth stages, giving them a more balanced risk-return profile that could be appealing to investors.
Debt to Equity Ratio
Financial resilience remains a cornerstone of our selection process. We favoured companies with a debt-to-equity ratio below 1.0, indicating that equity financing outweighs debt. Such structures typically reflect prudent capital management, lower financial leverage, and greater flexibility to navigate economic downturns without compromising growth plans.
Return on Equity
In general, we viewed positively companies exceeding the 10-year average ROE of the STI (around 9%). This benchmark serves as a useful reference for identifying small to mid-cap firms that demonstrate comparable effective equity utilisation and disciplined capital allocation as the large caps, which may translate into stronger shareholder returns over time.
Figure 1: 10-year average ROE of STI equals to 8.9%
Forward EPS Growth
We focus on companies exhibiting strong earnings momentum and robust financial metrics, indicating the potential for sustained performance improvement. Our preference is for companies with a forecasted 3-year forward EPS growth exceeding 10% per annum. We also recognise companies with credible recovery prospects and clearly identifiable growth catalysts, particularly when supported by constructive management guidance and a favourable market outlook.
Reasonable Valuations
Companies are further assessed on valuation metrics such as the price-to-earnings (PE) ratio and price-to-NAV (P/NAV) ratio. Comparing current multiples with 10-year historical averages provides insight into how valuations align with long-term performance and market expectations, this can help investors identify stocks trading at a discount or premium to historical norms and uncover structurally undervalued opportunities.
Homegrown Leaders
Recognised homegrown leaders are considered important focuses of EQDP because they play a key role in Singapore’s equity market and support MAS’s goal of revitalising local equities. These firms’ entrenched positions and high barriers to entry contribute to earnings stability and resilience. With strong fundamentals—including steady cash flows, prudent governance, and solid credit standing, those companies are capable for scalable growth through regional expansion, innovation, or consolidation. For clarity, we classify them into two groups – “Established Leaders”, which hold significant market share and strategic importance, and “Emerging Leaders”, which have strong local roots and growing influence, with the potential to evolve into established leaders over time.
Strategic Sector Alignment
Lastly, we assessed whether companies operate in sectors prioritised under Singapore’s Industry Transformation Maps and EDB growth plans, such as advanced manufacturing, digital economy, semiconductors and healthcare. These industries are key to Singapore’s long-term competitiveness and often benefit from policy support, funding incentives, and structural demand tailwinds—factors that can enhance growth prospects and investor appeal.
Overall, these criteria form a directional framework rather than a definitive checklist. Not all shortlisted companies meet every parameter, but each exhibits qualities that align with at least part of the EQDP’s potential focus. The next section presents the results from this preliminary screening exercise.
Table 1: Top EQDP potential beneficiaries, with green highlights denoting strong performance in each criterion
Profiles of Potential Beneficiaries
One of the world’s largest land transport groups, operates over 54,000 vehicles across 13 countries, spanning taxis, buses, engineering, and rentals. Operating profit in 1H2025 climbed nearly 23%, supported by stronger margins and tighter cost controls. Recent contract wins — including bus franchises in Victoria, Australia, the Jurong Regional Line in Singapore, and the Stockholm Metro — enhance earnings visibility. The group is actively bidding for new rail and bus contracts in the UK and Australia, including a major Melbourne rail tender, in order to anchor long-term growth. Although competition in local market’s point-to-point transport segment remains intense, ComfortDelGro’s overseas businesses, which contribute more than half of revenue, underpin its resilience.
Ho Bee Land is a well-established developer with a portfolio anchored by luxury residential projects and Grade-A commercial assets in Singapore, such as The Metropolis and Elementum, alongside a diversified base of overseas properties. Net profit in 1H2025 surged to SGD 49.8 million from SGD 8.8 million last year, supported by resilient rental income, joint venture contributions, and lower financing costs. Portfolio occupancy exceeds 95%, reflecting sound fundamentals. Nonetheless, the stock continues to trade at a steep 0.37x P/NAV, highlighting limited market visibility and research coverage despite its high-quality assets and earnings profile.
Related Article: These undervalued property gems are poised to benefit from MAS EQDP
PanUnited, one of the world’s largest producers of carbon mineralised concrete using carbon capture and utilisation technology, is well positioned to benefit from Singapore’s rising construction demand, with the BCA projecting annual demand of SGD 39–46 billion from 2026 to 2029. Mega-projects such as Changi Airport T5, Tuas Port, and new rail lines provide strong revenue visibility, while its green-concrete leadership aligns with the Singapore Green Plan 2030 and EDB’s sustainability agenda, enhancing pricing power and institutional appeal.
A largest homegrown integrated private healthcare provider with operations in 14 cities across five countries. Raffles Medical 1H2025 profit rose by 5% year-on-year, backed by steady domestic contributions and a solid cash position. The group has been continuously engaging in quality overseas expansions, with its China operations gaining momentum, bolstered by strategic partnerships in Shanghai and Chongqing. These collaborations serve as a new model for medical cooperation between Singapore and China and align with the country’s “Healthy China 2030” initiative, reinforcing the group’s regional growth platform.
As Singapore’s third-largest supermarket chain, Sheng Siong operates 82 outlets focused on value-driven groceries. Revenue rose 7.1% in 1H2025 to SGD 764.7 million, supported by new store openings, while gross margins improved by 0.7 percentage points on a stronger sales mix and cost controls. Amid global uncertainties, the group is prioritising efficiency gains through automation, technology adoption, and supply chain diversification. It is also pursuing expansion in areas with limited presence and awaiting results from tenders for three new stores.
SIA Engineering is a leading global provider of aircraft maintenance, repair, and overhaul (MRO) services, supporting over 80 international carriers and aerospace manufacturers through 25 subsidiaries and joint ventures in nine countries. Revenue for Q1 FY2026 (ending 30 June 2025) grew 33.4% year-on-year to SGD 358.4 million, driven by robust MRO demand. Expansion is underway with Base Maintenance Malaysia, where the first of two hangars in Subang is set to be operational by the end of this year. Its new joint venture in Cambodia will also commence line maintenance services in the second half of 2025.
Specialising in precision engineering for the semiconductor and aerospace sectors, UMS is poised to benefit from increasing semiconductor and aerospace demand. Despite geopolitical headwinds, 1H2025 revenue rose 14% year-on-year, net profit increased 6%, and gross margin expanded by 1.8 percentage points on a favourable product mix. With new facilities in Penang, UMS is set to benefit from the rebound in global chip demand and the strategic shift of semiconductor supply chains toward Southeast Asia, especially Malaysia and Singapore — where its two key customers have committed major expansion plans.
UMS’s current PE of 24x—nearly double its 10-year average appears justified due to its improved earnings visibility, stronger margins, and structural uplift from the semiconductor upcycle. The market is effectively re-rating UMS to capture its enhanced growth trajectory and more resilient risk profile.
As one of Asia’s largest brokerage houses with extensive regional reach, UOB Kay Hian benefits from market connectivity and a well-established research franchise. Commission and trading income rose 24.5% in 1H 2025, supported by higher trading activity across regional and US markets. Its Alpha Picks portfolio illustrates this research strength, posting a 17.7% gain in July 2025 and outperforming the STI by 12.4 percentage points, aided by timely positioning in small- and mid-cap counters that rallied on the launch of EQDP. With its ability to capture higher trading volumes amid market uncertainties, UOB Kay Hian is well positioned as one of the beneficiaries of EQDP.
Related Article: Singapore’s Financial Sector: Opportunities Extend Beyond Banks
In conclusion, the eight companies highlighted above represent our top picks as potential beneficiaries of EQDP, though many other small- and mid-cap stocks could also benefit from this initiative. We believe that by motivating the market participants to uncover hidden opportunities, EQDP presents investors a timely chance to explore the broader Singapore equity landscape.
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