There is a need to boost interest in small caps in the Singapore market

AT first glance, local equities are doing well - the Singapore Exchange's (SGX) research unit last week reported that over the first four months of this year, Singapore was Asia's best-performing stock market.

"FTSE Russell recently reported that the alternate FTSE Singapore Index generated a 9.5 per cent USD total return over the period, compared to a 0.1 per cent average decline for the 13 Asian benchmarks," said SGX. Dig deeper, however, and the picture is not so rosy. Cynics could quite justifiably point out that most of this outperformance has come mainly from the three banks and a handful of other blue-chips, while smaller stocks - which represent the bulk of the market - have lagged far behind.

For instance, between January and April, the FTSE ST Catalist Index lost 8.3 per cent, a slide that is made all the more stark when extended back 12 months - a fall of 17 per cent versus a rise of 9.8 per cent for the STI. Similarly, the FTSE ST Small Cap Index is down about 6 per cent since May last year.