Singapore’s EQDP Is Deepening the Market—But Capital Alone Will Not Fix It

Institutional investors overlooking Singapore’s financial district as capital flows spread across a broad range of listed companies.

Singapore’s effort to revitalise its stock market has moved beyond consultation and into capital deployment.

The Monetary Authority of Singapore (MAS) launched the Equity Market Development Programme (EQDP) in February 2025 with S$5 billion to place with Singapore-based asset managers running strategies focused on locally listed equities. Budget 2026 expanded the programme to S$6.5 billion. As of February 2026, MAS had allocated S$3.95 billion across nine managers, with another round of appointments expected.

The scale is meaningful for a market whose longstanding weaknesses have included thin liquidity outside the largest stocks, limited analyst coverage, a shrinking pool of listings and valuation discounts for smaller companies. Yet the EQDP should not be understood as a simple government purchase programme or a guarantee that Singapore shares will rise.

Its more important role is to strengthen the market’s operating system: the network of active fund managers, analysts, investors and listed companies that turns savings into patient equity capital.

How the EQDP Works

MAS is not selecting individual shares. It allocates capital to professional asset managers whose strategies invest significantly in Singapore-listed equities and support broader participation beyond the largest index constituents.

The first S$1.1 billion was placed with Avanda Investment Management, Fullerton Fund Management and J.P. Morgan Asset Management in July 2025. A further S$2.85 billion was allocated to six managers later that year, bringing the total to S$3.95 billion across nine firms. The programme was subsequently enlarged by S$1.5 billion to S$6.5 billion.

This structure matters. By working through competing managers, the programme preserves investment judgment and creates incentives to build sustainable teams, products and research capabilities. Managers still have to distinguish strong businesses from weak ones and are accountable for performance.

MAS also wants the public allocation to attract private money alongside it. If successful, S$6.5 billion becomes an anchor rather than a ceiling: a catalyst for additional institutional and retail participation.

Three Ways EQDP Can Change Singapore Equities

1. Better liquidity and price discovery

Singapore’s market has historically been deep at the top but considerably thinner below the Straits Times Index heavyweights. A company can have a sound balance sheet and credible business, yet remain difficult for large funds to own when daily trading value is low.

More active capital can narrow bid–ask spreads, increase turnover and make it easier to build or exit positions. This creates a reinforcing loop. Improved liquidity can attract more investors; more investors can support better price discovery; and better price discovery can make public-market valuations more relevant to company boards and potential issuers.

Early market data are encouraging but not conclusive. Average daily turnover reached S$1.53 billion in the third quarter of 2025, up 16% from a year earlier and the highest since early 2021. Trading activity in small- and mid-cap shares also improved. Securities daily average value rose by 21% in 2025 to nearly S$1.5 billion.

The direction is positive. The attribution is harder. Lower interest rates, Singapore-dollar inflows, stronger bank and index performance, global risk sentiment and broader market reforms have also influenced trading. It would be premature to credit every rise in turnover or valuation to the EQDP.

2. More attention beyond the largest stocks

The programme’s most consequential impact may be outside the benchmark index.

Many small- and mid-cap companies face an attention deficit. Limited research coverage reduces investor understanding; low investor interest suppresses liquidity; and weak liquidity makes research and institutional ownership less economical. This cycle can persist even when a company’s fundamentals are respectable.

EQDP managers have an incentive to research a broader universe because the programme explicitly seeks participation beyond large-cap shares. If this produces more analyst coverage, management engagement and investable funds, the market could become less concentrated in banks, real estate investment trusts and a small group of established blue chips.

The benefit will not be evenly distributed. Businesses with clearer disclosures, stronger governance, scalable earnings and credible capital allocation are more likely to attract lasting institutional interest. The EQDP may reduce the liquidity discount, but it cannot erase weak fundamentals.

3. A stronger listings and capital-formation loop

A healthier secondary market can improve the primary market.

Companies are more willing to list where they can access long-term investors, obtain credible valuations and trade with sufficient liquidity after an initial public offering. Singapore’s IPO activity improved in 2025, with more than S$2 billion raised, but the market still faces a structural challenge: delistings and takeovers continue to offset new arrivals.

EQDP therefore complements other reforms, including simplified listing processes, stronger investor recourse, the SGX–Nasdaq dual-listing bridge and SGX’s Value Unlock initiative. Capital deployment may stimulate demand, while these other measures work on supply, governance and market infrastructure.

That combination is more powerful than any single policy. A one-off injection can lift activity, but a durable market requires a pipeline of attractive companies and confidence that minority shareholders will participate fairly in value creation.

What the EQDP Cannot Solve on Its Own

The programme cannot manufacture earnings growth. It cannot turn poor disclosure into transparency or force boards to return excess capital. It cannot prevent global recessions, sector downturns or valuation corrections.

There is also a risk that expectations move faster than implementation. S$6.5 billion is substantial, but not all committed capital enters the market immediately. Managers need time to raise matching capital, construct portfolios and manage liquidity. Public allocations may also crowd into the same well-known names if the investable universe does not broaden enough.

The harder work sits with listed companies. Businesses that want to benefit from renewed investor attention need clearer strategy, better disclosure, disciplined acquisitions, credible succession planning and a rational approach to dividends, buybacks and reinvestment.

Capital can create the audience. Companies still have to earn the valuation.

What Investors Should Watch

Four indicators will show whether the EQDP is creating structural improvement rather than a temporary liquidity wave:

Breadth of turnover: Is trading activity rising across small- and mid-cap companies, or only in the largest index stocks?
Third-party capital: Are managers attracting meaningful private inflows alongside MAS allocations?
Research and ownership: Are more Singapore companies receiving sustained analyst coverage and institutional ownership?
Listings and governance: Does the IPO pipeline strengthen, and do listed companies improve disclosure, capital efficiency and shareholder engagement?

Investors should also separate market reform from security selection. Better liquidity can reduce friction and support valuations, but future returns will still depend on earnings, balance sheets, cash generation and the price paid.

Finance World’s Read

The EQDP is one of Singapore’s most important equity-market interventions in years because it targets the ecosystem rather than a single market symptom.

Its near-term effect is likely to be greater liquidity and attention. Its medium-term test is whether that attention spreads beyond familiar blue chips. Its long-term success will be measured by whether Singapore develops a self-sustaining loop of active capital, serious research, better-governed companies and credible new listings.

The early signals are constructive, but the programme should be judged over years rather than quarters. S$6.5 billion can help reopen the market’s circulation. It cannot replace the fundamentals that give a market lasting value.

Information is current as of 30 July 2026. This article is for general information and does not constitute investment advice.