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Arabian Post
14 hours ago
- Business
- Arabian Post
Singapore Channels S$1.1 bn into Stock‑Market Boost
Singapore's Monetary Authority has designated S$1.1 billion to three fund managers as the inaugural allocation of its S$5 billion Equity Market Development Programme. The scheme aims to invigorate the bourse and broaden market participation, focusing on smaller- and mid-cap equities. MAS selected Avanda Investment Management, JP Morgan Asset Management and Fullerton Fund Management for the initial round. Fullerton is part of state-owned Temasek. MAS indicated that the providers were chosen based on alignment with EQDP's goals and their capacity to enhance local asset‑management expertise. Over 100 applications were received, with MAS rolling out five‑year funding commitments in phases. The EQDP was unveiled in February in coordination with the Financial Sector Development Fund. Its mandate is to deploy capital through Singapore‑based managers investing primarily in domestic listed equities, with an emphasis on diversifying participation outside large‑cap stocks. ADVERTISEMENT Following the EQDP announcement in August last year, the Straits Times Index has surged 23.9% to July 18, 2025, according to MAS. Authorities believe that targeted investment injection could foster deeper liquidity, narrower bid‑ask spreads and more vigorous price discovery across the exchange. Analysts welcomed the move. One equity strategist said the programme signals a critical shift: 'MAS is using its balance sheet to catalyse private capital into under‑represented segments.' Market observers noted that while headline liquidity in the FTSE Straits Times Index is healthy, mid‑ and small‑cap names typically suffer from thin volume and wide spreads, deterring institutional and retail interest. JP Morgan's involvement is expected to bring global asset‑management experience to bear on local strategies. Avanda, a Singapore‑grown emerging‑markets specialist, and Fullerton, with sovereign backing, strengthen confidence that domestic competence will benefit from the infusion of global best practice. Details of each manager's mandate have not been disclosed, but MAS emphasised that performance will be measured not only by capital deployment but also progress in building domestic expertise in portfolio construction, trading infrastructure and market‑making behaviours. These elements are crucial to achieving sustainable liquidity gains. Experts point out that Singapore's programme mirrors efforts overseas, such as Japan's ETF purchases by its pension fund, but with a distinctive twist: the EQDP partners with private asset managers rather than buying equities directly. That design aims to stimulate skill transfer and innovation in execution capabilities. Further co‑investment rounds are expected later this year, with MAS reviewing submissions in stages to expedite capital deployment. The S$5 billion envelope is expected to span several tranches, signalling long‑term commitment to market enhancement. Since introducing a broad stock‑market review in August last year, MAS and its review group have identified several friction points, including limited participation by retail investors, dominance by large‑cap counters and constrained institutional activity in smaller names. EQDP is one among several initiatives aimed at remedying structural imbalances. Regulatory adjustments are also on the cards, with potential reforms covering short‑selling rules, stock‑lending frameworks and promoting algorithmic market‑making. MAS has indicated a willingness to consult key stakeholders, including retail brokerages and the Singapore Exchange, to create complementary regulatory enablers. Market participants have pointed out that EQDP funding alone may not be sufficient. A private fund‑operations specialist commented: 'Capital without market infrastructure enhancements risks being parked rather than deployed actively.' MAS' selection criteria emphasise capacity building—suggesting this concern has been taken into account. Beyond boosting trading volumes, the manoeuvre may help Singapore position itself as a regional equity hub. By fostering advanced trading strategies, tighter spreads and higher turnover, the city‑state stands to attract more international fund flows. Simultaneously, support for domestic managers reinforces Singapore's ambition to strengthen its plug‑and‑play asset‑management ecosystem. MAS confirmed that progress and outcomes will be tracked and disclosed periodically. Selected managers will have to report on liquidity metrics, investment activity and capability transfer milestones. This level of oversight reflects a strategic approach to ensure that public‑private collaboration delivers measurable structural improvements.
The Star
15 hours ago
- Business
- The Star
Singapore central bank to place S$1.1bil with asset managers to boost stock market
A view of the Monetary Authority of Singapore's headquarters. REUTERS/Darren Whiteside/ SINGAPORE: Singapore's central bank will place S$1.1 billion ($856.36 million) with three asset managers as part of a S$5 billion programme to boost the stock market, it said on Monday, with more co-investments to be announced late this year. The move comes as part of an ongoing probe into the local stock market by the Monetary Authority of Singapore and a review group set up in August last year, with the aim of strengthening the way the market functions. The fund managers selected as part of Singapore's Equity Market Development Programme (EQDP) are Avanda Investment Management, JP Morgan Asset Management and Fullerton Fund Management, which is owned by Singapore's sovereign fund Temasek. MAS said it considered "a range of factors" when choosing the managers, including the "alignment of their proposed fund strategies with EQDP objectives" and their commitment to contribute to the growth of Singapore's asset management capabilities. It added that more than 100 global, regional and local asset managers have shown interest in receiving funds for co-investment under the development programme, and that it will review the submissions in batches to speed up the appointment of asset managers and the deployment of capital. In February, MAS and the Financial Sector Development Fund (FSDF) announced that the S$5 billion programme would invest in strategies managed by Singapore-based asset managers that "have a strong focus on Singapore listed equities and broaden investor participation beyond large-cap stocks", the central bank said. Since Singapore announced that it would set up the review group to revive the stock market in August last year, the benchmark Straits Times Index had gained 23.9% as of July 18. ($1 = 1.2845 Singapore dollars) - Reuters
Mint
16 hours ago
- Business
- Mint
Singapore central bank to place S$1.1 billion with asset managers to boost stock market
Reuters Published 21 Jul 2025, 10:01 AM IST SINGORE, - Singapore's central bank will place S$1.1 billion with three asset managers as part of a S$5 billion programme to boost the stock market, it said on Monday, with more co-investments to be announced late this year. The move comes as part of an ongoing probe into the local stock market by the Monetary Authority of Singapore and a review group set up in August last year, with the aim of strengthening the way the market functions. The fund managers selected as part of Singapore's Equity Market Development Programme are Avanda Investment Management, JP Morgan Asset Management and Fullerton Fund Management, which is owned by Singapore's sovereign fund Temasek. MAS said it considered "a range of factors" when choosing the managers, including the "alignment of their proposed fund strategies with EQDP objectives" and their commitment to contribute to the growth of Singapore's asset management capabilities. It added that more than 100 global, regional and local asset managers have shown interest in receiving funds for co-investment under the development programme, and that it will review the submissions in batches to speed up the appointment of asset managers and the deployment of capital. In February, MAS and the Financial Sector Development Fund announced that the S$5 billion programme would invest in strategies managed by Singapore-based asset managers that "have a strong focus on Singapore listed equities and broaden investor participation beyond large-cap stocks", the central bank said. Since Singapore announced that it would set up the review group to revive the stock market in August last year, the benchmark Straits Times Index had gained 23.9% as of July 18. This article was generated from an automated news agency feed without modifications to text.
BusinessToday
19 hours ago
- Business
- BusinessToday
STI Opens Higher Amid Global Optimism, Local Sentiment Buoyed By Bank Gains
Singapore equities opened firmer on Monday, with the Straits Times Index (STI) rising 13.66 points or 0.33% to 4,203.16 at 9.00 am, following upbeat momentum from global markets last week and strong early performances from heavyweight banks. Initial trading saw a total of 54.51 million securities worth S$52.26 million changing hands, with market breadth skewed towards gainers (101 advancers against 41 decliners), signalling a positive start for the session. Bank counters led early gains with DBS edging up 0.07 points to S$47.06, while UOB traded at S$37.01 and OCBC at S$17.34, reflecting cautious optimism after Wall Street's modest rally last Friday, driven by tech earnings and resilient economic data. Meanwhile, Seatrium held at S$2.37, Keppel traded at S$8.10, and SGX stood at S$15.91, all mostly steady as investors awaited further cues from regional corporate earnings and the upcoming US Federal Reserve policy decision due later this week. Indices linked to low-carbon and REIT sectors, such as the iEdge-OCBC Singapore Low Carbon Select 40 Capped Index (3,281.18) and iEdge S-REIT Leaders Index (1,043.60), also posted mild gains, aligning with a broader risk-on sentiment across Asia. Positive economic outlooks in Malaysia and China, coupled with easing concerns over global inflation, are likely to provide further support for the Singapore bourse throughout the day. Related
Business Times
21 hours ago
- Business
- Business Times
Will NTT DC Reit recover from its weak debut?
[SINGAPORE] It was a good week for investors in the Singapore market, except perhaps for those who took a chance on the initial public offering (IPO) of NTT DC Real Estate Investment Trust (Reit). The much-hyped data centre trust, which began trading last Monday (Jul 14), ended the week at US$0.95 – or 5 per cent below its IPO price of US$1. With its focus on a hot asset class, and GIC among its cornerstone investors, NTT DC Reit drew a lot of attention when it launched its IPO. Based on the nearly 599.9 million units available, the offering was approximately 4.6 times subscribed. An additional 51.5 million units were over-alloted. NTT DC Reit also came to market at a seemingly opportune moment. For one thing, the Straits Times Index (STI) has been on a tear since the Liberation Day sell-off in April, and has closed above the 4,000 mark on every trading day since Jul 2. On Friday, the local-market benchmark closed at 4,189.50, up nearly 2.5 per cent for the week. There has also been ample appetite in the market recently for Reits that own data centres. In fact, among the seven Reits that are components of the STI, the best performer last week was Keppel DC Reit (KDC) – which rose 4.1 per cent. A NEWSLETTER FOR YOU Tuesday, 12 pm Property Insights Get an exclusive analysis of real estate and property news in Singapore and beyond. Sign Up Sign Up This bump might have been partly due to Maybank initiating coverage on KDC, with a 12-month target price of S$2.40. In a report dated Jul 17, the research house said that KDC – which holds 24 data centres across 10 countries, worth some S$5 billion – is set to benefit from big trends such as digitalisation, cloud migration and the adoption of artificial intelligence. Maybank is forecasting KDC's distribution per unit (DPU) to grow 4.9 per cent a year to 2027, driven by rent escalation and acquisitions. KDC closed Friday at S$2.28, which reflects a 2024 DPU yield of 4.1 per cent. By comparison, NTT DC Reit holds six data centres with an appraised value of nearly US$1.6 billion. At its IPO price, it is forecast to deliver an annualised distribution yield of 7.5 per cent for the nine months to Mar 31, 2026; and a distribution yield of 7.8 per cent for the full year to Mar 31, 2027. So, why did NTT DC Reit have such a lacklustre debut? Where are all the investors who tried to get their hands on its units during the offering? Why is the market not excited about its high projected distribution yield? Rising risks for S-Reits One concern I keep hearing is that NTT DC Reit's projected yield may not be sustainable – because it is based on a 100 per cent payout of its distributable income, and the Reit's capital expenditure requirements may rise in the future. Another concern is that NTT DC Reit faces tenant concentration risks, with its top 10 tenants accounting for 62.6 per cent of its monthly base rent. Worse, its largest tenant – described in its prospectus as a Fortune 100 US automotive company – accounts for 31.5 per cent of its total monthly base rent. Many market watchers assume that NTT DC Reit's largest tenant is Tesla. However, NTT DC Reit's agreements with its customers contain confidentiality provisions that prevent disclosure of their identities. Its prospectus said: 'For many of these customers, it is critical that the geographical locations of the data centres in which (their) equipment, information and data are stored are kept confidential in order to minimise the risk of physical threats and intrusions into the relevant data centre.' The way I see it, the assumption that NTT DC Reit is heavily exposed to Tesla could haunt it in the months ahead – sending a chill down the spines of investors whenever the electric vehicle maker, or its chief executive Elon Musk, makes headlines for the wrong reasons. Responding to questions about this risk, the manager of NTT DC Reit said its largest tenant uses its data centres for mission-critical workloads, and has leases extending to 2033 with no termination clause. The manager added that the tenant is absent from the assets that NTT DC Reit may acquire from the sponsor group over time. '(Therefore), their concentration will only decrease as the Reit continues to make incremental acquisitions.' Another factor that might have contributed to NTT DC Reit's weak debut is the uncertainty about the direction of long-term global interest rates. Ten-year US Treasury bonds currently yield about 4.42 per cent; in 2019, the yield was significantly less than 3 per cent. This is affecting all the Singapore-listed Reits (S-Reits), of course. The iEdge S-Reit Index chalked up a total return of 54.4 per cent during the five-year period up to end-2019, which trounced the STI's total return of 14.9 per cent. The tables turned, however, as interest rates soared following the pandemic; and as companies such as Keppel, Sembcorp Industries and Singtel unlocked value and refocused their businesses. Over the five-year period up to last Friday, the iEdge S-Reit Index returned just 4.6 per cent, while the STI returned 99.3 per cent. The iEdge S-Reit Index has lagged since the beginning of this year as well, with a total return of 5.2 per cent versus STI's total return of 13.4 per cent. While income-oriented investments remain hugely popular with local investors, the most exciting new listings over the next couple of years may well not be in the S-Reit field. Hot data-centre trusts To be clear, I'm not suggesting that NTT DC Reit will not recover from its rocky debut. While higher interest rates since the pandemic have weighed on S-Reits recently, two of the three best-performing components of the iEdge S-Reit Index over the past decade are focused on data centres – namely, KDC (with a total return of 254.4 per cent) and Mapletree Industrial Trust (total return of 133.6 per cent). It is entirely possible, in my view, that NTT DC Reit will eventually find its feet and perform strongly. Of course, much depends on it achieving or surpassing the forecasts and projections in its prospectus, and acquiring an additional asset or two from its sponsor group on terms accretive to its DPU. There is certainly a lot riding on the success of NTT DC Reit. This is, after all, the most significant new listing in the Republic since the Monetary Authority of Singapore formed the Equities Market Review Group last year. The measures announced by the review group so far revolve around spurring demand in the local market, and making it easier for companies to list in Singapore. Perhaps the review group should also look into whether enough is being done to ensure that companies that do list are able to effectively engage with investors, and inclined to quickly address their concerns. Drawing more new listings to the Singapore market will matter only if they are exciting to local investors, and enhance the vibrancy of the market ecosystem.
