As Singapore’s largest broker by sales force, its growth potential in this market was already flagged by The Edge Singapore back in Jan 16, 2025. We maintain our view that this is a company investors should continue to watch.
UOB Kay Hian is a counter that fits perfectly with an investment thesis that sees greater retail participation amid the uplift in Singapore’s market. The Monetary Authority of Singapore (MAS) has allocated $3.95 billion out of its $5 billion Equity Market Development Programme (EQDP) to nine fund managers to invest in Singapore equities.
Thus far, three of them (Avanda Investment Management, Fullerton Fund Management and JP Morgan Asset Management) have launched their funds. Lion Global Investors is channelling the capital into its existing LionGlobal Singapore Trust Fund instead. The remaining managers are Amova Asset Management, AR Capital, BlackRock, Eastspring Investments and Manulife Investment Management. The influx of capital will likely drive further trading activity as retail investors look to ride the wave of growth.
In fact, the gains are already evident in the market. Shares of the Singapore Exchange (SGX) have been on a tear since August 2024, when the MAS announced that it was forming a review group to bolster Singapore’s stock market. SGX shares closed at $9.87 on Aug 1, 2024, and have risen by 84% since then, closing at $18.17 on Feb 10. This comes after a banner year of IPO activity, with 13 listings raising some $2.8 billion in capital in 2025, the highest in seven years.
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Given that it is a listed broker, UOB Kay Hian does not attract formal analyst coverage from other brokers. “Look at the logo on your own namecard,” quips one of them when UOB Kay Hian was mentioned. In addition, UOB Kay Hian does not actively promote itself to the broader investment community as much as other companies, which might have resulted in relatively thin trading volume.
However, UOB Kay Hian was the subject of a recent initiation report by Australia’s Macquarie, which has been stepping up its coverage of local small and midcaps amid a more buoyant Singapore market.
In their Jan 16 note, Macquarie analysts Jayden Vantarakis and Hanel Tan initiated coverage on UOB Kay Hian with an “outperform” call. Vantarakis and Tan’s target price of $3.12 is based on 10.5 times FY2027 earnings, compared with the 13.1 times average multiple of other financial services companies. UOB Kay Hian’s stock can go up to $3.91 under a bull case but could drop to $2.33 in a bear case, they add.
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In addition, the pair believe that UOB Kay Hian will benefit from its second- and third-largest markets, Hong Kong and Malaysia, in the coming year as trading volumes improve. They expect UOB Kay Hian’s ebit margin to reach an ebit margin of 45% in FY2026 to FY2028, up from the 41% average in FY2023 to FY2025. Trading and interest income are expected to go up by a CAGR of 8% and 12%, respectively, due to higher trading volumes and retail participation, Macquarie adds.
“This robust fundamental outlook is closely correlated with overall market turnover, which we project to rise from $305 billion per annum in 2024 to $352 billion by 2027,” says Vantarakis and Tan.
If the Singapore market continues to improve in vibrancy into yet another year, UOB Kay Hian might be the stock to keep an eye on.
