By Gwendoline Tan
If you’ve only got a minute:
- The Singapore government has rolled out a comprehensive set of measures targeted at strengthening the local equity market.
- The EQDP aims to boost liquidity, research and participation, especially beyond large-cap stocks.
- Instead of trying to time the market, investing regularly and staying diversified can help you capture opportunities over the long-term.
In February 2026, Singapore’s Straits Times Index (STI) reached a historical high, breaching 5,000. This follows a combination of government-led initiatives, stronger corporate earnings, and renewed interest from both retail and institutional investors.
Since the equities market review group was formed in August 2024, the market has steadily gained momentum, with the STI first breaking past 4,000 in March 2025 – a milestone that now feels firmly in the rear-view mirror.
Yet, as the market reaches new highs, familiar questions remain. Can this renewed momentum be sustained, and is there still room for further upside in Singapore equities?
A key part of the answer lies in ongoing efforts to revitalise Singapore’s equity markets, one of which is the Equity Market Development Programme (EQDP).
Read more: Budget 2026: Strengthening support
What is the EQDP?
Singapore’s stock market has historically been dominated by the same familiar names.
While these are solid companies, this narrow focus has many promising smaller companies under the radar, with limited attention and investment. As a result, we saw the local stock market shrinking for years, with delistings outstripping new ones.
That leaves us with a market rich in potential, but poor in participation. Limited research coverage, low trading activity, and high minimum investment amounts have kept retail investors on the sidelines.
In response, the Monetary Authority of Singapore (MAS) and the Financial Sector Development Fund (FSDF) launched the EQDP in February 2025. This S$5 billion initiative (expanded to S$6.5 billion in the Singapore Budget 2026) aims to address liquidity challenges and revitalise the local equity landscape.
Read more: I’m ready to invest, how can I start?
How does it work?
At its core, the programme involves deploying capital through carefully selected local and international fund managers that employ strategies that support investment activity and research capabilities within Singapore.
Capital allocation to fund managers
Rather than investing into companies directly, MAS invests in strategies of asset managers that have been carefully selected based on their track record and proven investment capabilities. These asset managers will actively hunt for the best local companies to invest in.
As of March 2026, S$3.95 billion has been allocated across 9 asset managers, with the next batch to be appointed in mid-2026.
Focus on under-represented segments
A key feature of the EQDP is its emphasis on broadening investor participation beyond the traditionally dominant large-cap banks and real estate stocks.
Under this programme, MAS requires participating strategies to invest predominantly in Singapore-listed equities, with a clear focus on small- to mid-cap stocks that are less actively traded in comparison with larger, more established ones.
Draw capital from other investors
Beyond MAS’s initial investment, the programme is designed to attract additional funds from other retail and institutional investors, helping to amplify its overall impact on the market.
In simple terms, the EQDP aims to create a positive cycle.
Channelling capital through dedicated fund managers aims to increase trading volumes, making smaller companies more attractive to a wider range of investors. This increased liquidity then leads to more efficient price discovery and potentially better valuations for these companies.
Over time this helps to strengthen confidence in the local equity market, boosting the long-term appeal of the Singapore Stock Exchange (SGX) as a place to raise capital.
Read more: Investing in newly listed companies (IPOs)
Other support measures
As Greek philosopher Aristotle famously said, “the whole is greater than the sum of its parts”. In a similar way, the EQDP is best understood not in isolation, but as a part of a broader ecosystem supporting Singapore’s equity market.
Besides the EQDP, MAS has rolled out other complementary initiatives to support investor demand, equity supply (through encouraging new listings), and strengthen connectivity through cross-border partnerships.
Examples of these include the S$30 million value unlock package, the GEMS (Grant for Equity Market Singapore) scheme, and tax incentives for companies looking to list on the SGX.
These are aimed at surfacing undervalued quality companies, driving capital management, and improving return profiles.
In addition, the SGX is proposing to lower the minimum amount required to invest in stocks and other instruments. This will be done through the reduction of board lot sizes, from the current 100 units to 10 units for stocks priced above S$10. This means that for a stock that costs S$15 per unit, your initial investment amount which used to be S$1,500 is now S$150.
What this means for investors
The impact of the EQDP and other initiatives is multifaceted.
With more capital flowing into Singapore equities, investors may begin to see greater visibility and access to companies beyond the usual blue chips, particularly within small- and mid-cap segments that have historically been less researched and less actively traded.
Greater research coverage can lead to higher-quality analysis on companies beyond the usual suspects, helping to narrow the information gap between professionals and everyday investors.
Taken together, these efforts will enhance the vibrancy and competitiveness of the Singapore equity market over time, potentially broadening opportunities for investors.
That said, markets remain inherently uncertain. While initiatives like EQDP may provide supportive tailwinds, they do not remove the impact of economic cycles, interest rate changes, or company-specific risks.
Rather than trying to time the market, investors may be better served by staying invested and maintaining a well-diversified portfolio across geographies and asset classes.
For those looking to build exposure gradually, strategies such as dollar-cost averaging (DCA) can help smooth out market fluctuations over time.
Read more: Is lump-sum investing or DCA better for you?
Find out more about: Invest-Saver
To help simplify your decision-making process, investment experts at DBS have curated an essential list of funds called the CIO Insights Funds, which provide a steady base for building your investment portfolio. This includes index funds as well as ready-made discretionary portfolio solutions like digiPortfolio for broader diversification.
Read more: Diversify to help manage investment risks
Find out more about: Investing with CIO Insights Funds
In summary
While it is difficult to predict whether the recent gains in the STI can be sustained or how much further it may rise, investors need not rely on timing the market.
By staying invested, keeping your portfolio diversified, and investing regularly, you can continue to participate in potential opportunities even amid market uncertainty.
