Investing Updates: Commentary: Singapore’s stock market is waking up and the hard part starts now

Source:

https://www.channelnewsasia.com/commentary/singapore-stock-market-sgx-review-group-5709421

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Singapore’s long-sleepy stock market has shown clear signs of revival in 2025, with the Straits Times Index reaching multiple record highs. The rally has been driven mainly by banks and blue-chip stocks, while mid-cap companies have also begun to attract stronger interest. However, the key question is whether this momentum represents a sustainable resurgence or merely a short-term rebound.

A major boost to sentiment has come from the Monetary Authority of Singapore’s S$5 billion Equity Market Development Programme (EQDP), designed to inject liquidity into small and mid-cap stocks. Nearly S$4 billion has already been allocated to fund managers, and the launch of the iEdge Singapore Next 50 Index has provided greater visibility to mid-cap companies. Increased confidence has also translated into a strong IPO year: Singapore led Southeast Asia in IPO proceeds, raising about US$1.6 billion across nine deals, largely driven by two major REIT listings.

Despite these positives, liquidity remains the critical challenge. Sustained trading volume is essential to attract IPOs and support higher valuations. Market turnover has recently declined, raising concerns that EQDP funds alone may be insufficient. Compared with regional peers such as Malaysia, Thailand and Australia, Singapore still lacks a steady flow of domestic institutional funds.

The commentary argues that more initiatives are needed. These include expanding broker custodial services, encouraging margin financing, aligning practices with global norms, and attracting Singapore-based companies listed overseas to return home. The creation of mid-cap ETFs could also provide stable investment vehicles, though this depends on sufficient underlying liquidity.

Ultimately, while Singapore’s market has revived, revival is not reinvention. The next phase requires a multi-pronged strategy to deepen liquidity, diversify sectors, and convince both institutional and retail investors that a rejuvenated SGX offers long-term value.