“Overall, strength in the equities business continues to surprise positively,” the pair write in a note on April 1, adding that they expect the SGX’s securities daily average value (SDAV) to grow to $1.9 billion by FY28, up from an estimated $1.5 billion for 1H 2026. The SGX reported on March 12 that its SDAV in February was $2.1 billion.
A significant driver behind the SGX’s performance stems from the initiatives by the government to bolster the Singapore equities market. In August 2024, the Monetary Authority of Singapore (MAS) set up the Equities Market Review Group (EMRG) to come up with measures to bolster the stock market. The group’s final report was published on November 19, 2025.
One of the measures proposed was the Equities Market Development Programme (EQDP). The EQDP aims to channel capital into the local equities market via private asset managers. Originally, the government set aside $5 billion for the programme. This was subsequently raised to $6.5 billion in February after Prime Minister Lawrence Wong said in Budget 2026 that he was topping up the fund by $1.5 billion.
So far, $3.95 billion have been placed with nine asset managers: Avanda Investment Management, Fullerton Fund Management, JP Morgan Asset Management, Amova Asset Management (formerly Nikko Asset Management), AR Capital, BlackRock, Eastspring Investments, Lion Global Investors, and Manulife Investment Management.
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Sukriti and Chionh say that the deployment of EQDP capital will have a direct impact on cash equities as well as an indirect impact on derivatives. This is because hedging demand for futures tends to go up with increased cash activity. That said, the pair note that the uplift from the EQDP may not be sustainable.
“Over the past 6-9 months, most of the cash-equity uplift appears to have come from market-cap expansion rather than from higher turnover velocity, and market breadth remains a concern,” Sukriti and Chionh write, adding that Singapore’s IPO pipeline and value unlock initiatives for mid-cap companies appear to be lagging behind the liquidity injections.
“While we expect [the] EQDP to be positive overall, we see a risk that if breadth lags, flows may concentrate in large caps, diluting EQDPs intended market-wide liquidity uplift.”
Bank of America’s target price of $20.50 is taken from the average of their dividend discount model and a target forward PE multiple of about 28 times on estimated FY27 earnings. Specifically, the bank is assuming a 10% compound annual growth rate in dividend per share through FY31 and a terminal growth rate of 3.5%.
“SGX’s valuations have caught up to peers given the run-up in the stock (up 48% y-o-y) on expectations of EQDP flows/EMRG impact and general re-rating across the STI (Straits Times Index),” say Sukriti and Chionh.
Shares of SGX are trading down by 0.4% at $19.88 as at 4.35 pm.
Source: Bank of America
