MAS targets 19x liquidity boost with EQDP for SG SMID stocks: report

Currently, the bulk of trading activity remains concentrated in STI components.

Singapore’s small- and mid-cap stocks could see trading liquidity rise by as much as 19 times if the Monetary Authority of Singapore’s (MAS) Equity Market Development Programme (EQDP) is fully deployed, according to a report by Maybank Research.

“The EQDP could potentially boost segment liquidity by 19x when fully deployed,” the report stated, adding that if fund managers are required to match MAS’s capital, “there could be a significant multiplier effect, in our view.”

The EQDP is part of a broader set of measures by MAS aimed at revitalising Singapore’s equity market. Currently, the bulk of trading activity remains concentrated in STI components.

“In 2025 YTD, 80% of SGX average daily value (ADV) originated from STI components. The rest contributed just SGD261m of ADV,” the report noted.

By redirecting institutional mandates to smaller, non-index stocks, Maybank believes the initiative can unlock new valuation and trading momentum in underutilised parts of the market.

However, the success of this liquidity push depends on more than just capital allocation. Maybank emphasised that governance standards will likely determine which companies attract institutional interest.

“While liquidity, growth, and valuations would be important stock selection factors under these new mandates, the most important criterion is likely to be corporate governance (CG),” the analysts wrote.

“Historically, Singapore’s SMIDs have had patchy CG track records and some have significant overhangs centered on minority protection, share manipulation, capital structures, acquisitions,” the report explained, referencing multiple case studies from the past decade.

To anticipate potential winners under EQDP, Maybank screened SGX-listed firms with market caps between $300m and $5b. Using their proprietary MIBG ESG 2.0 ratings and Sustainalytics governance scores, they filtered for companies rated “strong” or “average” in governance.

“We exclude companies ranked ‘weak’ or have no ratings,” the report clarified. Additional filters included above-average daily trading volumes, robust 3-year earnings outlooks, and high cash-to-market-cap ratios.

The final list of 18 shortlisted companies includes AEM, Nanofilm, Centurion, UMS, CSE Global, ComfortDelGro, Singapore Post, SATS, and IFAST, amongst others.

“We believe the results of this screen, where better CG intersects with valuations and liquidity, could offer the most appealing counters for institutional investors looking to deploy initial funds to the Singapore market,” Maybank concluded.

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