On 21 February 2025, the Equities Market Review Group (EMRG) unveiled a set of measures aimed at boosting the vibrancy and competitiveness of Singapore’s stock market. The initiative marks one of the most significant efforts in recent years to deepen liquidity in stocks beyond the STI (Straits Times Index), increase investor participation, and attract new listings on the SGX.
At the heart of this initiative is the Equity Market Development Plan, which adopts a two-pronged approach: 1) boosting demand for Singapore equities and 2) improving the supply of listed companies.
Boosting Demand: A $5 Billion Allocation To Be Actively Managed
To stimulate demand, MAS and the Financial Sector Development Fund (FSDF) have committed S$5 billion under the Equity Market Development (EQDP) programme. The funds will be actively managed by selected asset managers and are meant to be deployed across a broad range of Singapore-listed companies, not just the constituents of the Straits Times Index (STI).
In July 2025, the first tranche of S$1.1 billion was awarded to three fund managers:
- Avanda Investment Management (founded by former GIC executives),
- Fullerton Fund Management (backed by Temasek and Income Insurance),
- J.P. Morgan Asset Management (division of JPMorgan Chase & Co).
Each manager will be responsible for deploying a share of the funds to stimulate trading activity and investor interest across the SGX.
To support this effort, tax exemptions will be granted on profits made by participating managers. MAS will also roll out additional support through the GEMS (Grant for Equity Market Singapore) programme to help expand local investment talent. Meanwhile, Singapore’s Global Investor Programme (GIP) will be refined to direct more capital from family offices into locally listed equities.
Improving Supply: Making It Easier For Companies To List On SGX
Beyond boosting demand, the second part of the plan focuses on improving the supply of listed companies on SGX. The government wants to make Singapore a more attractive listing destination, especially for local enterprises.
Key measures include:
- Corporate tax rebates for listed companies
- Government support to prepare high-growth local businesses for IPOs (announced in Budget 2025)
- A more streamlined listing process under SGX RegCo
- Stronger requirements around financial disclosures and governance
Together, these efforts are designed to raise the quality and quantity of companies on the SGX, ultimately giving investors more options and greater market depth.
How Has The STI Performed & Why Broader Market Support Is Needed
The Straits Times Index (STI), which tracks the top 30 blue-chip stocks in Singapore, has been a consistent outperformer. Over the past 1, 3, 5, and even 10 years, it has outperformed many regional benchmarks, and investors can easily gain exposure through low-cost ETFs that track the STI.
But once you go beyond the STI, the picture changes dramatically.
The SGX All-Share Index, which includes around 90 companies, has underperformed once the STI stocks are removed. These mid-to-smaller companies typically see lower trading volumes, minimal analyst coverage and weaker investor interest.
Could This Injection Of Capital Be A Game-Changer?
The scale of the initiative suggests that it could be. Currently, the total assets under management (AUM) in Singapore-focused active equity funds stand at $4.2 billion. STI ETFs have just under $3.9 billion. (Data compiled using the ifast fund selector https://www.ifastgm.com.sg/igm/funds/fund-selector).
Keeping in mind that most of this $8 billion is invested in the top 30 largest stocks makes the new S$5 billion allocation if deployed thoughtfully and as intended a significant injection of capital. It could breathe life into underappreciated and likely under-allocated mid- and small-cap names.
Increased capital flows may lead to higher trading liquidity, greater institutional coverage, and possibly the launch of new investment products focused on the broader market, which would in turn attract more capital.
What This Means For You As An Investor
For investors, this could open up new opportunities. In the short term, a rising tide may lift many boats, especially as institutional investors deploy fresh capital into previously overlooked, and possibly undervalued, stocks.
If you have a higher risk appetite, now may be a good time to explore strong, under-researched companies beyond the STI, particularly those with solid business fundamentals and long-term growth potential.
There are also implications for those in the finance industry. With fresh funds being allocated and new grants introduced, fund managers and analysts focused on Singapore stocks will likely be in greater demand. If you’re looking to break into the industry or take on a more SGX-focused role, this is a good moment to get your resume in shape.
Still, while short-term flows may boost share prices and trading volumes, long-term performance will ultimately depend on company fundamentals. Investors should remain disciplined and focus on businesses that can deliver sustainable earnings growth.
A Rare Move With Real Money Behind It
This is a rare and bold initiative. It’s not just a policy change, but also real money being deployed into Singapore’s stock market. For local investors, it represents a potential turning point, especially for those who have long been frustrated by the limited opportunities outside of the STI.
While risks remain, and results will take time to materialise, the scale and structure of this programme suggest that Singapore’s equity market may be heading into a new era, one that finally brings more attention, liquidity and opportunity to the broader market.
Read Also: Revitalising the SGX: 4 Measures To Be Implemented To Help Boost Singapore’s Equities Market
Photo Credit: Moo Kar Ming, DollarsAndSense
