Beyond funding, improved trading volume, SMID pricing also good metrics of EQDP’s success

[SINGAPORE] Singapore’s Equities Market Development Programme (EQDP) has signalled its ability to draw in private capital, but analysts say that its success needs to also be measured by the programme’s momentum and long-term ecosystem changes.

The EQDP, introduced in February 2025, has so far attracted more than a dollar in private capital for every dollar of public funds invested. This works out to a crowd-in ratio of more than 1:1, said Minister for National Development Chee Hong Tat in a speech in October.

Analysts noted that the ratio is an encouraging early indicator of the programme’s success.

The EQDP is helping generate broader investor interest in Singapore equities beyond the capital committed by the government, said Gerald Wong, founder of Singapore-based investment advisory platform, Beansprout.

He noted the large increases in several participating EQDP funds; the LionGlobal Singapore Trust Fund, for example, reached S$2.27 billion as at September 2026, up from S$245 million in late 2025.

The platform has also ignited growing interest among retail investors in the Singapore equities market and in the investment strategies offered by EQDP funds.

In particular, private capital is being drawn into the small- and mid-cap (Smid) segment, which has been under-owned for years, said Hugh Chung, chief investment officer at Endowus.

“The programme has helped correct a long-standing mispricing in the small- and mid-cap space through better research coverage and liquidity,” he said.

But Wong noted that not all private capital attracted should necessarily be considered new money entering Singapore equities – some investors may have reallocated funds from existing Singapore equity investments into EQDP funds.

In fact, Chung said Singapore equities would have continued to draw steady investor interest regardless, given its rare combination of safe-haven appeal and attractive dividend yields.

The incremental value likely lies mainly in the small- and mid-cap segment, which has been excluded from the blue-chip story that is driving the broader market rally, he said.

The overall programme’s long-term success should thus not be assessed solely by the amount of capital raised, analysts said.

“Ultimately, investors need to achieve positive outcomes for the initiative to be sustainable,” said Germaine Share, director, manager research at Morningstar.

Improvements in market liquidity

The increase in trading activity is a key factor determining success because it improves the vibrancy of the market, said OCBC head of equity research Carmen Lee.

Lee noted that the average traded volume per day reached 1.5 billion units in 2026, from 1.4 billion units in 2025 and 1.3 billion units in 2024.

Similarly, the average traded value per day grew to S$2.1 billion in 2026, from S$1.5 billion in 2025 and S$1.2 billion in 2024.

As the market gains traction and grows both breadth and depth, it could attract more initial public offerings as well as grow the existing listings on the Singapore market, she said.

To show that EQDP is deepening the market rather than simply adding capital to it, another measure should be deeper and more persistent liquidity, said Thilan Wickramasinghe, head of Singapore research at Maybank Investment Banking Group.

At the stock level, this means seeing the benefits extend beyond the 30 names in the benchmark Straits Times index, with more small- and mid-caps experiencing sustained improvements in liquidity and valuations, he said.

A strong IPO market

A strong IPO market is also a strong indicator of success.

A healthy pipeline of quality companies, including regional growth businesses, choosing to list in Singapore rather than overseas would signal that founders and their private backers regard Singapore as an attractive market to list in, said Endowus’ Chung.

With the EQDP, the likelihood that quality companies would choose to list in Singapore also grows as valuation in the overall small- and mid-cap market improves, said Kenneth Ong, head of Singapore equities at Manulife Investment Management.

But analysts expect a stronger listings market will take time and effort to materialise.

Chung noted that markets such as Japan and South Korea – which also underwent market-reform programmes – took years of consistent policy follow-through before the results showed up in prices.

Beansprout’s Wong also expects that sustaining the momentum would require continued efforts to improve market liquidity, deepen research coverage and attract quality companies to list in Singapore.

At last count, all but one of the IPOs launched this year were trading at the IPO price or below water, which indicates that investors are taking a hit on the capital they invested.

Still, rather than signalling problems with the local market, this can be seen more as a sign of a maturing investment environment, said Robert St Clair, head of investment strategy, Fullerton Fund Management.

For example, although the global cost of capital went up significantly in 2026 and dampened risk appetites, there was still some “fear of missing out” or “fomo” forces at work, which drove IPO valuation expectations up at listings.

Investors are also concerned about concentrated exposures to artificial intelligence and the IT sector, along with greater geopolitical risks.

St Clair said: “Struggling IPO performance is perhaps better described as a valuation and risk-appetite reset, amplified by the maturing investment environment rather than evidence that the IPO mechanism itself is broken.”

Singapore remains resilient, offers income play

Overall, Singapore markets remain attractive to investors due to their “safe haven” appeal, analysts said.

“As long as geopolitical volatility persists or intensifies, Singapore’s neutrality is the underlying structural driver that can continue to present long-term opportunities in the Singapore market, perhaps throughout the rest of this decade,” said Manulife’s Ong.

Singapore equities are a structural beneficiary of geopolitical uncertainty, and offer an attractive relative value dividend hedge to volatile and concentrated tech sectors for global investors, he said.

The market benefits from strong institutional credibility and currency stability, while Singapore equities also typically provide a combination of lower volatility and higher dividend yields relative to global equities, he added.

For local investors, the Straits Times Index remains an important part of allocations, given Singapore’s safe haven status, high dividend yields, and a better currency match for local investors, even if valuations are historically higher, said Endowus’ Chung.

But he sees further opportunity in the small- and mid-cap counters that have long been under-covered and under-owned and are not in the STI, but are part of the broader FTSE ST All-Share Index.

However, the small- and mid-cap stocks require significant research resources and active management, even if they can offer attractive alpha opportunities, said Morningstar’s Share.

Fund managers that continue to invest in research capabilities, engage closely with portfolio companies, and manage capacity and liquidity prudently are likely to be best positioned to deliver strong investor outcomes, she said.

Overall, the best approach to investing in Singapore is not to focus solely on either large caps or small- and mid-caps, but to have exposure to both, said Eastspring Investments portfolio manager Bryan Yeong.

“Large caps provide liquidity, resilience and market leadership, while small- and mid-caps offer access to a broader set of growth and value opportunities,” he said.

“As liquidity and investor participation continue to improve, we believe a balanced approach across the market offers the most compelling opportunity set.”