Unlocking Hidden Gems: How Singapore's $50M Initiative Could Supercharge Non-STI Stocks

The Monetary Authority of Singapore (MAS) has dropped a bombshell on the local equity market with its S$5 billion (approx. $50 million) Equity Market Development Programme (EQDP). This isn't just another government grant—it's a strategic, high-octane plan to inject liquidity into the underbelly of the Singapore Exchange (SGX), where non-STI (non-Straits Times Index) and small- to mid-cap stocks have languished for years. The goal? To turn overlooked companies into tomorrow's darlings by pairing institutional firepower with tax incentives, streamlined IPOs, and a newfound focus on price discovery. And for investors with the courage to dig beyond the blue-chips, this could be a once-in-a-decade opportunity.

The EQDP: A Game-Changer for the “Forgotten” 90% of the Market
The EQDP's first tranche—S$1.1 billion allocated to fund managers like Avanda, Fullerton, and JP Morgan—targets a simple truth: most Singapore-listed stocks trade at a fraction of their fair value. These are companies with solid fundamentals but no Wall Street coverage, no retail hype, and no institutional love. The initiative is designed to flip that script. By co-investing with managers who specialize in small- and mid-cap stocks, MAS is betting big on the idea that liquidity is the lifeblood of any thriving market.

For example, Avanda's Singapore Discovery Fund is already building a portfolio around three themes: “Value-up,” “Local Champions,” and “Turnaround.” That's not just jargon—it's a roadmap for finding companies like Huationg Global (41B), a construction and logistics play trading at a 3x P/E and 0.5x P/B. At these levels, it's a net-net stock that could explode if just one analyst writes a report on it. Similarly, Hong Leong Asia (H22), with its 48.7% stake in China Yuchai, is a construction play that's quietly dominating regional markets but trades at a 14x P/E. The EQDP's focus on price discovery could finally give these stocks the attention they deserve.

The Tax Incentives? They're a Magnet for Institutional Capital
MAS isn't just throwing money at the problem—it's engineering a system to keep it flowing. The 5% concessionary tax rate for new fund managers and the 20% tax rebate for primary listings are no small numbers. They're incentives designed to make Singapore a magnet for global capital. And with IPO timelines now capped at 6–8 weeks, companies that previously hesitated to list are now lining up.

Take Sheng Siong (OV8), the supermarket chain with 77 stores. It's a cash-cow in a fragmented retail sector, yet it trades at a 21x P/E. Why? Because it's not in the STI. But with the EQDP's spotlight, this stock could see the kind of institutional interest that drives valuations higher. The same logic applies to ISOTeam Ltd (5WF), a construction services provider with a S$188.7 million order book. Its 36.5% net profit surge in 1H2025 is a sign of strength, but its current valuation is a bargain.

The Risks? They're Manageable
Of course, there's no free lunch. Small- and mid-cap stocks are inherently riskier. But the EQDP's structure—co-investing with proven managers and providing tax breaks—mitigates some of that risk. Plus, the program's focus on sectors like sustainability and digital infrastructure ensures that the companies getting boosted are aligned with long-term growth trends. For example, Food Empire (F03), a global F&B manufacturer, is expanding its coffee production in India and India. At a 12x P/E, it's a prime candidate for a re-rating as the EQDP drives institutional coverage.

The Verdict: Time to Dig for Diamonds in the Rough
The EQDP isn't just a shot in the arm for Singapore's equity market—it's a masterstroke. By targeting the 90% of the market that's been ignored for years, MAS is creating a gold rush for investors willing to look beyond the STI. Stocks like Huationg Global (41B), Hong Leong Asia (H22), and Sheng Siong (OV8) are sitting ducks for the liquidity tsunami coming their way.

If you're not already in this space, now's the time to get curious. These aren't just “value traps”—they're companies with strong balance sheets, real earnings, and a lack of hype. And in a market where hype often drives price, the absence of it is a blessing. So, dust off your spreadsheets, do the due diligence, and get ready to outperform the STI. The EQDP is the catalyst; the rest is up to you.