Singapore’s EQDP third tranche set to boost small and mid-cap stocks

Singapore’s Equity Market Development Programme (EQDP) is set to inject another S$1.45 billion into the market, with a significant portion expected to benefit small and mid-cap stocks (SMIDs). JPMorgan Chase analysts Khoi Vu and Rajiv Batra highlighted that this third tranche could serve as a catalyst for SMIDs, which have underperformed the broader market despite the initial liquidity boost from the first two allocations.

The analysts estimate that around S$435 million could flow into SMIDs, assuming a 30% allocation from the latest tranche. This influx represents roughly twice the average daily turnover volume of the iEdge Singapore Next 50 Index, which tracks mid-cap companies. While the benchmark Straits Times Index (STI) has surged over 30% since the EQDP’s launch in July 2025, the iEdge index has lagged by 25% year-to-date.

The Monetary Authority of Singapore (MAS) has appointed five fund managers for this tranche, including M&G Investments, Amundi, HSBC Asset Management, Franklin Templeton, and Natixis Investment Managers. Additionally, MAS will allocate S$20 million to enhance liquidity for about 80 eligible SMIDs, aiming to improve market activity and visibility. JPMorgan’s analysts noted that SMIDs with resilient earnings, strong balance sheets, and low interest rate exposure are likely to attract investor interest.

JPMorgan maintains an optimistic outlook for Singapore equities, citing strong policy buffers and government commitment to market development. The analysts reiterated their 12-month target for the STI at 6,500 and highlighted Singapore as the top market to own in Southeast Asia. Among their top picks are Singtel, Yangzijiang Shipbuilding, Keppel, Singapore Exchange, Venture Corp, and Sea, while DBS was rated as neutral.