MAS’ S$5bn Liquidity Boost: What It Means for Singapore’s Stock Market
- ellaintan
- Feb 24
- 2 min read
Singapore’s stock market has been in the spotlight lately, and for good reason. With declining trading volumes and fewer companies listing on the Singapore Exchange (SGX), the Monetary Authority of Singapore (MAS) is stepping in with a S$5bn Equity Market Development Programme (EQDP). But what does this mean for everyday investors? Let’s break it down in simple terms.
What is the MAS Liquidity Boost?
MAS is injecting S$5bn into fund managers who focus on Singapore-listed stocks. The goal? To increase trading activity, help stocks get fairer valuations, and attract more companies to list on SGX.
Other supporting measures include:
Encouraging single-family offices (SFOs) to invest at least S$50mn in Singapore equities
Tax incentives for fund managers who allocate at least 30% of their funds to Singapore-listed stocks
A corporate tax rebate of up to 20% for new listings
Faster listing processes and reduced post-listing regulatory burdens
Is This a Game Changer for the Singapore Market?
This move by MAS is a step in the right direction, but experts have mixed opinions on whether it will turn things around completely.
Short-Term Impact: Many analysts agree that small and mid-cap stocks (SMCs) will see the most benefits from this injection of funds
Long-Term Impact: If executed well, this could bring more IPOs and attract institutional investors, giving the market a much-needed boost
Challenges: There’s still uncertainty. Liquidity is a long-standing issue, and investors remain cautious. Experts say fundamentals like strong earnings and reasonable valuations will still be key to success
Which Stocks Could Benefit?
If you’re wondering which stocks might see the biggest boost, analysts have already highlighted several potential winners.
Top Small & Mid-Cap Picks
ComfortDelGro (CDG): Expected to gain from acquisitions and stronger earnings in the transport sector
CSE Global: Well-positioned to benefit from trends in digitalization
China Sunsine: A leader in rubber accelerators, set to benefit from China’s economic recovery
Centurion: Strong demand for worker and student accommodation is fueling growth
Digital Core REIT: Riding the wave of growing data centre demand
PropNex: A strong player in the real estate market
Large Caps That Could See Increased Liquidity
UOB, Singtel, Venture Corp, Sembcorp Industries, Keppel Corp: Likely to attract institutional inflows
ST Engineering, Yangzijiang, DFI Retail: Strong fundamentals and growth potential
What Should Investors Do?
For retail investors, this presents an opportunity to rethink their portfolio strategies. Here’s how:
Monitor liquidity trends: Stocks with increasing trading volumes could indicate growing investor interest
Stick to strong fundamentals: Look for companies with solid earnings and sustainable growth
Stay updated: Watch out for further MAS announcements that could impact the market
Final Thoughts
MAS' S$5bn fund is a welcome move that could bring much-needed liquidity to the market, especially for small and mid-cap stocks. While it’s unlikely to be an overnight fix, it could set the stage for a more vibrant SGX in the coming years.
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