$1.5b govt boost signifies commitment to revitalising Singapore stock market: Experts

SINGAPORE - The additional $1.5 billion to be injected into the Singapore equities market, as

stated on Feb 12 in the Budget 2026 speech,

signals the Government’s commitment to maintain the momentum in revitalising the local bourse, experts said.

But market revitalisation needs time and constant investment, and not just a one-off injection of funds, they added.

Prime Minister Lawrence Wong in

his Budget speech

said that the additional top-up to the Financial Sector Development Fund will also help to grow Singapore’s fund management industry.

The development fund was set up by the Monetary Authority of Singapore (MAS) to provide grants to firms and individuals in the financial services sector to promote Singapore as a financial centre.

The new injection of $1.5 billion into the fund is aimed at boosting the

Equity Market Development Programme (EQDP)

, which was launched in July 2025.

The EQDP is a $5 billion MAS initiative to invest in and boost the vibrancy of the market. Some $3.95 billion has been allocated so far to nine fund managers to invest in the market.

Industry response to the programme has been encouraging, PM Wong said.

Sixteen firms were also listed on the Singapore Exchange (SGX) in 2025, after a dearth of listings between 2023 and 2024.

MAS is expected to announce a third tranche of managers under the EQDP some time in 2026.

UBS global banking co-head of Asia country coverage Tan Kuan-Ern said: “It is a clear demonstration of the Government’s seriousness and intent to reboot stocks on the Singapore Exchange, and for that reboot to stick.”

Deloitte South-east Asia capital markets services leader Tay Hwee Ling added that the top-up serves as a further boost to market confidence, signalling continued policy commitment to strengthening Singapore’s equities ecosystem.

She noted that the EQDP and the other market measures have already positively impacted the market. “This is reflected in the improved quality of initial public offering (IPO) candidates and the generally resilient post-listing performance observed since the measures were implemented in 2025,” she said.

“This has, in turn, strengthened confidence among both investors and prospective issuers evaluating Singapore as a listing venue. Funds deployed into the market are expected to create a natural ‘churn effect’, catalysing follow-on liquidity, price discovery and secondary fund flows over time.”

DBS group research Singapore/Asean equity market strategist Yeo Kee Yan added that the measures have benefited the Singapore equity market well beyond the sum committed, the bulk of which comes from the $5 billion announced in 2025.

Since Feb 21, 2025, the market capitalisation of companies listed on the SGX mainboard has risen by $173 billion, which has significantly exceeded MAS’ funding commitment, he noted.

Indeed, experts noted that because the fund managers selected to receive funds from EQDP have to provide one-for-one fund raising, the total deployment of funds is somewhere around $13 billion.

Maybank Securities’ head of research Thilan Wickramasinghe said the EQDP expansion constitutes a sizeable liquidity boost for the Singapore stock market, and will enable the funding of more high-quality asset managers with strategies that invest significantly in Singapore equities.

Mr Christopher Forbes, CMC Invest’s head of Asia and the Middle East, said that more capital is important as it means more managers, broader mandates, and deeper two-way flow in under-researched names. “Because each EQDP dollar is designed to crowd in third-party capital, the multiplier effect on trading depth will exceed the headline figure,” he said.

He added that the market needed this top-up and there may be more injections if warranted.

“This is precisely because the window is favourable,” he said.

“The EQDP is tackling structural gaps that took years to develop: chronic under-coverage of mid-caps; a shallow domestic growth equity fund ecosystem; and a retail investor base tilted towards property and fixed income. Fixing these requires sustained, programmatic investment, not a one-off injection when things look dire.”

But if future tranches are needed, they should be tied to clear metrics, he added. These could be measurements such as mid-cap liquidity, whether IPOs are diverse by sector and the breadth of research.

EY’s Asean and Singapore IPO leader Chan Yew Kiang noted that since the launch of the EQDP, market liquidity has indeed improved, alongside more IPO activity, and he expects the momentum to continue in 2026 barring major geopolitical conflicts.

But he also added that the injection of funds and continued support will be important to sustain the vibrancy of the market.

“Building a mature market that can consistently support investor participation will require both time and continued investment,” he said.

Bank of Singapore’s managing director of equity research Carmen Lee added that funds could also be used in a targeted manner to grow specific industries like defence, solar power and sustainable aviation fuel. In this way, more buzz can be generated around these sectors and such companies can be attracted to Singapore, both to list and to provide employment opportunities.

What’s next

But it is not just about the Government injecting money into the market, as this is only part of a broader ecosystem strategy, experts said.

Deloitte’s Ms Tay noted that structural initiatives like the Value Unlock programme to help listed companies increase their valuations and the Global Listing Board, which allows dual listings on the SGX and Nasdaq, can drive long-term market vibrancy.

“As these measures gain traction and market momentum builds, the expectation is that normal market mechanisms will progressively take the lead in sustaining liquidity and activity, reducing the need for continued government capital injections over time,” she said.

CMC Invest’s Mr Forbes also said Government funding alone will not make Singapore a top-tier equity hub: “Singapore’s advantage is that it is moving on multiple fronts, such as capital, regulation and ecosystem, rather than relying on any single lever.”

Looking into the entire value chain and ecosystem is also the purpose of a new workgroup announced by MAS and the Ministry of Trade and Industry on Feb 13 to help companies from Singapore and the region raise money at every stage of their growth.

This applies to companies ranging from early start-ups seeking seed funding to those expanding across the region and eventually to late-stage financing and IPOs.

The workgroup will also recommend measures to strengthen Singapore’s growth capital markets, including venture capital, private equity and private credit, as well as securitised assets.

It will study the entire financing value chain, from sourcing investment opportunities and structuring deals, to raising and deploying capital, and eventually recycling returns into new investments.

Ultimately, Mr Forbes said: “The money is substantial. What matters now is execution.”