S'pore stock market climbs after MAS allocates $1.1b to 3 fund managers for small-cap investments

Straits Times

2 days ago

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The benchmark Straits Times Index closed on July 25 at around 4,261 points, buoyed by stocks such as DBS Bank, Yangzijiang Shipbuilding and DFI Retail Group.
SINGAPORE – Whoever said the Singapore stock market was boring would have had to eat their words, given the amount of action that took place last week.
For starters, the Monetary Authority of Singapore (MAS) on July 21 said it would allocate
a combined $1.1 billion to three fund managers to invest in the local stock market.
With MAS putting money to work through the fund managers, the hope is that others will follow suit.
The three fund managers are Avanda Investment Management, Fullerton Fund Management and JP Morgan Asset Management, with the next batch of fund managers expected to be announced by the fourth quarter of 2025.
The $1.1 billion is part of the $5 billion set aside under the Equity Market Development Programme announced by MAS in February, which allocates capital to a range of funds managed by local as well as foreign fund managers based in Singapore. Eligible fund strategies include those focused on Singapore equities, or with a significant allocation to them.
MAS deputy chairman Chee Hong Tat said on July 21 that the asset managers should help crowd in private capital, and boost interest and liquidity in Singapore equities, particularly small to mid-cap companies.
Mr Chee, who is also Minister for National Development, added that the aim is not just to inject funds into the Singapore market, but also to develop the fund management industry.
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The move helped to lift the benchmark Straits Times Index (STI) to an all-time high of 4,273 points on July 24. The blue-chip index closed on July 25 at around 4,261 points, buoyed by stocks such as DBS Bank, Yangzijiang Shipbuilding and DFI Retail Group.
Smaller-cap stocks in the spotlight
But it was the smaller, non-STI stocks like Nam Cheong, Oiltek International, Nanofilm Technologies and newly listed Lum Chang Creations that stole the spotlight last week.
Nam Cheong jumped more than 27 per cent to close the week at 72 cents. Malaysia's biggest owner of offshore support vessels has recorded strong business performance in the past year and has three big long-term contracts worth RM1.7 billion (S$516.2 million).
At 92 cents, Oiltek went up by 23.5 per cent through the week, after the company proposed a secondary listing on Bursa Malaysia. However, the company's chief executive Henry Yong said the proposed secondary listing is 'at a preliminary stage and will involve extensive preparatory work', and did not commit to a timeframe.
Nanofilm closed on July 25 at 78 cents, up over 16 per cent through the week. This was despite mixed reviews from investors and analysts on its stock, which could have been influenced by matters such as reports of a potential acquisition of a minority stake in Sydrogen Energy, as well as tariff uncertainties.
Lum Chang Creations had a great start on the Singapore Exchange's Catalist board on July 21, when it began trading at 30 cents and rose to as high as 33.5 cents through the day. It closed its first day at 30.5 cents, 22 per cent above its initial public offering price of 25 cents.
The property revitalisation firm closed the week on July 25 at 38.5 cents.
Other small-cap stocks such as Wee Hur, Frencken Group and iFast also jumped.
Selling of a business and a resignation
Shares of Singapore Post ended the week at 63 cents, down 2.33 per cent, despite having risen to a three-year high of 65.5 cents earlier in the week.
On July 22, SingPost announced the sale of its entire freight forwarding business, Famous Holdings, for about $177.9 million.
The move is part of the company's strategy, announced in March 2024, to 'divest non-core assets and businesses to recycle capital'.
The sale resulted in an estimated realised gain on disposal of $10.5 million and about $104 million in cash for the company.
Maybank analyst Jarick Seet told The Straits Times that the monetisation of assets will continue to be the key for share price performance for SingPost.
He added that the company is also looking to sell its flagship retail-commercial mixed development SingPost Centre in Paya Lebar Central, but he expects that to happen only in 2026.
Catalist-listed Aoxin Q&M Dental ended the week up 4.3 per cent at 4.9 cents, after announcing on July 22 the resignation of its executive director and chief executive Shao Yongxin.
The company's audit committee received a whistle-blower report against Dr Shao on July 21, and said it had launched an investigation into the matter.
Aoxin cited 'differences in views and opinions' with its parent, mainboard-listed Q&M Dental Group, regarding the strategic direction of the dental business as the reason for Dr Shao's resignation.
Other market movers
Shares of ComfortDelgro jumped by more than 13 per cent through the week, closing on July 25 at $1.64, levels not seen since 2021.
This came after Maybank analyst Eric Ong issued a July 25 report calling the stock a 'massive laggard' excluded from the recent 'super-charged' market rally.
He noted that the transport provider continues to deliver 'respectable' earnings growth and a decent yield of almost 6 per cent, and could also be one of the 'prime candidates' to benefit from MAS' fund allocation initiative.
DFI rose 13.5 per cent through the week to close on July 25 at US$3.54, after announcing that its underlying profit rose 38.9 per cent to US$105 million (S$134.5 million) for the first half ended June 30, from US$75.6 million in the same period the year before.
The supermarket and retail store operator attributed the profit growth to lower financing costs and an improved showing in its health and beauty, and food segments, among other factors.
Sales in DFI's health and beauty segment grew 4 per cent on the year to US$1.3 billion and profit grew 8 per cent to US$109 million on a like-for-like basis.
ST Engineering's stock reached a new high of $8.94 on July 24 before closing the week at $8.87.
This was after it announced on July 23 that it had secured about $4.7 billion worth of new contracts in the second quarter of 2025. These comprised $1.5 billion from its commercial aerospace segment, $1.5 billion from its defence segment and $1.7 billion from urban solutions.
Another stock that did well was Keppel DC Reit, which closed the week at $2.32, up by 1.3 per cent.
This came after it reported on July 25 strong financial performance for the first half ended June 30, with a 57.2 per cent year-on-year jump in distributable income at $127.1 million.
This was driven by the acquisition of data centres Keppel DC Singapore 7 and 8 and Tokyo Data Centre 1, alongside contract renewals. Distribution per unit for the first half of 2025 increased 12.8 per cent year on year to 5.133 cents.
Engineering firm Hiap Seng Industries more than doubled in value after it announced on July 23 that Indonesian petrochemical producer Chandra Asri had purchased an 11.9 per cent stake in the company.
Shares of the steel fabrication service provider closed on July 25 at 3.9 cents, more than triple its value at the start of the week.
What to look out for this week
Several results and business updates are expected this week.
Great Eastern, Mapletree Industrial Trust, Raffles Medical, CapitaLand Ascott Trust, Seatrium and OCBC Bank are among those expected to announce earnings for the first half of financial year 2025, while Singapore Airlines will give its business update for the first quarter of financial year 2025/2026 on July 28.