MAS picks Avanda, Fullerton, JP Morgan for $1.1 bil placement; The Edge Singapore picks five stocks to watch

The Monetary Authority of Singapore (MAS) has appointed Avanda Investment Management, Fullerton Fund Management and JP Morgan Asset Management (JPMAM) as the first batch of asset managers that will launch fund strategies under the Equity Market Development Programme (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 says the three firms’ proposed fund strategies are aligned with the EQDP’s objectives and will crowd in third-party capital alongside MAS’s funding.

The three asset managers have also committed to expand or contribute to the growth of the asset management and research capabilities in Singapore.

Over 100 global, regional and local asset managers have indicated interest in the EQDP since it was announced in February. MAS is reviewing the submissions in batches to speed up the appointment and deployment process.

By end-2025, MAS expects to announce a second batch of asset managers that will manage a portion of the remaining funds under the EQDP.

The EQDP, announced by the MAS’s equities market review group in February, aims to strengthen the local asset management and research ecosystem and increase investor interest in Singapore’s equities market, particularly small- and mid-caps.

The review group, which was set up in August 2024 to explore ways to revitalise the Singapore stock market, aims to complete its work and release its final report by end-2025.

Upcoming funds

Avanda, co-founded in 2015 by former GIC CIO and 2023 Presidential Election candidate Ng Kok Song, says its Avanda Singapore Discovery Fund will be fully allocated to Singapore-listed companies with a “strong focus” on the small- and mid-cap segment.

Avanda tells The Edge Singapore that the strategy will be managed by Richard Chan, partner and head of equities; and Sherman Lim, portfolio manager, equities.

MAS did not provide a breakdown of how the $1.1 billion sum will be divided, and all three firms declined to reveal how much they will each receive.

Fullerton and JPMAM also side-stepped questions about their respective fund strategies. Fullerton only said it will launch a “dedicated Singapore equities unit trust” here investing in Singapore-listed stocks “across all market capitalisation”. “It will offer daily liquidity and be made available to everyone including retail, accredited and institutional investors.”

More funding for research reports

MAS 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 preIPO firms and newly-listed companies. This takes the maximum funding from $4,000 currently to $6,000 per research report.

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To broaden investor outreach and engagement, especially among younger investors, a portion of the $50 million will be made available to research houses to defray costs of disseminating research via digital media.

MAS will also provide new funding to support research on private companies with a “strong local presence”, in a bid to foster investor familiarity and build a pipeline of potential listings. Applicants may submit proposals to MAS for consideration.

The listing grant under GEMS will also be expanded to enhance product diversity and trading liquidity in Singapore. A new funding sleeve will cover Singapore Depository Receipts and Foreign Depository Receipts (DRs) with underlying Singapore stocks, providing $40,000 per DR issuance.

Investor recourse

To bolster investor confidence, maintain market integrity and uphold the reputation of Singapore’s capital markets, MAS is considering additional measures to strengthen investor protection.

Firstly, MAS will consult on proposals to enhance existing legal provisions that enable investors to “ride on” a court action or civil penalty to seek compensation. This is intended to reduce the burden on investors when pursuing civil recourse action.

Next, MAS will also consult on proposals for representatives to organise and carry out legal action on behalf of investors. This is aimed at facilitating not-for-profit assistance to investors, including by organisations such as the Securities Investors Association Singapore.

Lastly, MAS will also consult on setting up a grant scheme to defray the costs of organising investors and taking legal action for cases involving market misconduct. This is to reduce cost barriers that deter investors from seeking compensation through civil action.

MAS is also reviewing measures to improve the attractiveness of the Catalist board, reduce board lot sizes, enhance efficiency of post-trade custody arrangements and develop cross-border partnerships.

‘Longer-term investments’

Retail investors should see the Singapore stock market as a venue for “longer-term investments” and not just “short-term punting”, says National Development Minister Chee Hong Tat at a media doorstop on July 21.

“We do want to see more participation from retail investors, not to see the stock market for short-term punting, but really to make longer-term investments — to grow their investment nest egg, which I think will also be helpful for the young and the middle-aged before they grow older, [in order] to provide better retirement,” says Chee, who is also deputy chairman of MAS.

Chee says the EQDP is “not just about injecting funds” into the local bourse, but there is also a “developmental objective”.

Meanwhile, the GEMS scheme aims to provide greater support to analysts who cover these “different companies”, says Chee, enabling them to produce more reports of “better quality” that investors will find useful.

Ahead of the $5 billion funding, numerous brokers have already suggested small- and mid-cap companies that are likely to benefit. Between them, more than two dozen stocks have been shortlisted.

The Edge Singapore, as a keen observer of the Singapore market, has come up with five names of our own.

Hopefully, as the $5 billion is intended, more funding elsewhere will be drawn in as the market further improves, and more listed companies will deserve their rightful valuation from investors.

Read about The Edge Singapore's five stocks to watch: