Singapore equities attract retail and fund flows as EQDP widens

Nine asset managers are in the S$6.5b EQDP with funds undeployed and more small-cap capital expected in H2 2026.

Singapore equities remain resilient in choppy markets as retail investors and government-backed fund flows help cushion downside swings, even as institutional investors continue to shape market direction.

Carlos Lim, Group Head of Securities and Leveraged Products at CGS International Securities, said Singapore’s market is supported by dividend-paying names such as banks and real estate investment trusts. A base of long-term holders has also helped stabilise trading.

Lim said the Equity Market Development Programme, or EQDP, has added structural support, with about S$1.5b already invested into the market. “Structurally, that helps the market to be a bit more resilient,” he said.

Carmen Lee, Head of Equity Research at OCBC, said the programme has strengthened the wider market ecosystem, including asset managers, broking houses, research houses and investor relations teams. That has encouraged retail buying ahead of fuller fund deployment.

Retail flows are especially important for small and mid-cap stocks, which Lee said have been overlooked for years as investors focused on the STI’s 30 largest counters. Lower valuations in that segment have made them more attractive as investors anticipate more institutional capital.

Lim said retail investors are also acting as bargain hunters during market swings. Stronger access to information has helped them identify quality names and buy during pullbacks.

Still, retail demand may not be enough to set valuation floors on its own. Lim said companies must improve transparency and communicate clearly if they want the market to assign higher valuations.

Lee said the EQDP allocation has increased from S$5b to S$6.5b, with nine asset managers appointed and some funds still undeployed. She said the second half of 2026 could bring more capital into small and mid-cap stocks.

For Singapore equities, the test is whether retail interest can support broader valuations once institutional flows begin to dominate the next phase of deployment.