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Investing.com -- The Monetary Authority of Singapore (MAS) is preparing to implement its S$5 billion Equity Market Development Program (EQDP) in the third quarter of 2025, aimed at broadening investor participation beyond large-cap stocks. The program, announced in February, will invest in strategies managed by Singapore-based asset managers with a strong focus on Singapore-listed equities.
Macquarie has identified a basket of small-mid cap stocks that could benefit from the EQDP mandates, screening for companies with over US$0.5 million average daily value traded that are not in the index. The firm’s analysis includes Singapore REITs and notes that mandates will likely be allowed to hold up to 40% in ASEAN stocks outside Singapore.
Performance of the identified stocks has lagged so far, with the Singapore-only basket of 18 stocks underperforming the 30-stock Straits Times Index by 13-19% since August 2024. Macquarie suggests that deploying the S$5 billion allocation could constitute approximately three months of buying activity and potentially change relative performance.
The EQDP is part of a series of measures announced by the Equities Market Review Group to improve the competitiveness of Singapore’s equity market, which Macquarie notes has among the highest concentration of liquidity in its top-10 listed equities among Asian markets covered by the firm.
Macquarie’s top picks for small-cap Singapore stocks that may benefit from these new mandates include CD, FR, IFAST, PREIT and STH, while its preferred large-cap index selections are OCBC, SCI, STE, CLAR and DFI. The firm also highlights KDCREIT, which will join the Straits Times Index on June 23.
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