CGSI removes SIA Engineering, BRC, Frencken, Pan-United and PropNex from ‘high-conviction list’

In the wake of the Monetary Authority of Singapore’s (MAS) appointment of the first batch of fund managers that will launch fund strategies under the Equity Market Development Programme (EQDP), CGS International has removed SIA Engineering (SIE), BRC Asia, Frencken Group, Pan-United and PropNex from their “high-conviction list” due to “share price outperformance”.

Taking their place are Singapore Exchange (SGX), Yangzijiang Shipbuilding, LHN and Hong Leong Asia (HLA), according to a July 21 CGSI report.

“We view the liquidity boost as positive for the stock market,” say CGSI analysts Lock Mun Yee and Lim Siew Khee. “In addition to liquidity, fundamental and investible theses remain the key focus for investors, and we see broadening of research and improving listing support, investor protection and confidence as complementary to the entire value chain.”

Yangzijiang is a laggard in the industrials space and its valuation remains cheap relative to the MSCI Singapore Index, the analysts say.

They also include SGX on potential virtuous cycle impact from the EQDP, HLA on re-rating of the construction sector and LHN on the potential monetisation of its co-living business.

In addition to the companies mentioned, CGSI also picks Keppel, SATS, and UOL Group among large-caps and CSE Global, Food Empire Holdings, Marco Polo Marine and Q&M Dental Group among small-cap stocks.

Table: CGSI

Strengthening investor protection

MAS has appointed Avanda Investment Management, Fullerton Fund Management and JP Morgan Asset Management as the first batch of asset managers that will launch fund strategies under the EQDP, announced the central bank and financial regulator on July 21.

MAS will place a combined initial sum of $1.1 billion with the three firms, out of $5 billion that has been set aside for the EQDP.

MAS is reviewing the submissions in batches to speed up the appointment and deployment process. By 4Q2025, MAS expects to announce the second batch of asset managers that will manage the remaining funds under the EQDP.

MAS has also announced a $50 million commitment to enhance the Grant for Equity Market Singapore (GEMS) scheme, which has been extended from end-2026 to end-2028. The additional sum has been set aside from the Financial Sector Development Fund (FSDF).

The enhanced Research Development Grant will provide additional funding of $1,000 for each research report, with a further $1,000 for initiation reports and research on pre-initial public offering (IPO) firms and newly-listed companies.

The raised amount takes the maximum funding from $4,000 currently to $6,000 per research report, and takes effect from July 21.

According to MAS, the enhanced funding aims to “boost investor awareness” and trading interest within “under-researched” segments, particularly in small- and mid-cap companies.

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