MAS’ third EQDP shot could inject S$435m into small, mid-caps, lifting underperforming segment: JPM
The liquidity injection, however, will take some time to trickle down
JPMorgan Chase predicts a S$435 million influx into Singapore’s small and mid-cap stocks (SMIDs) following the third tranche of the Equity Market Development Programme (EQDP). The first two allocations of S$4.5 billion in seed funds have already spurred liquidity, but SMIDs have underperformed the benchmark index. Analysts estimate that if 30% of the third tranche is allocated to SMIDs, it could result in approximately S$435 million.
The Straits Times Index (STI) has surged by over 30% since the program began, reaching an all-time high of 5,801.96. SMIDs, however, have lagged, trailing the index by 25% year to date. The Monetary Authority of Singapore (MAS) has allocated S$1.45 billion to the third batch of EQDP asset managers, bringing the total program allocation to S$5.4 billion.
SMIDs with strong earnings, healthy balance sheets, and low interest rate exposure are expected to attract investor interest. MAS will also provide S$20 million to support market-making activities for eligible SMIDs. The analysts maintain a 12-month target for the STI at 6,500 and recommend an overweight position in Singapore equities within Southeast Asia.
Written by urgent.news from The Business Times - Companies & Markets's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
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