Identifying Stocks That Could Benefit From MAS’ S$5b Liquidity Boost

On 21 Feb 25, the MAS equities market review group revealed a S$5b investment initiative to be channelled to asset managers with a focus on Singapore-listed equities. Our screening of small mid cap stocks based on trading liquidity, P/B and PE ratio have identified approximately 40 stocks that could benefit. Our top picks in the small mid cap space include ComfortDelgro, CSE Global, China Sunsine, Centurion, Digital Core REIT, Marco Polo Marine, Propnex, Riverstone, Singapore Post, and Valuetronics.

WHAT’S NEW

• MAS Equities Market Review Group Announces S$5b Investment Initiative to Enhance Market Liquidity
  On 21 Feb 25, the Monetary Authority of Singapore’s (MAS) equities market review group (established in Aug 24) announced a S$5b investment initiative aimed at boosting liquidity for Singapore’s capital market. The strategies will be actively managed and diversified across various counters, rather than solely focusing on index component stocks. As a result, we believe the small mid cap stocks in Singapore will be the biggest beneficiaries of this measure.

The initiative will channel the funds to asset managers with a “strong investment track record” and a focus on Singapore-listed equities. Funded through its investment portfolio and the Financial Sector Development Fund, the programme aims to enhance market liquidity and support Singapore’s fund management ecosystem. MAS will begin evaluating eligible fund managers and strategies in the coming months.

• Screening for Small Mid Cap Stocks That Could Benefit From MAS Measures
  We conducted a screening of small mid cap stocks in the market cap range of S$200m-2b, based on the following criteria:
  • Three-month average daily traded value (ADTV) of at least S$0.3m,
  • P/B ratio of less than 1.0x, and
  • Trailing 12 months (TTM) PE ratio of below 20x.

This screening exercise has identified 37 small mid cap stocks that could benefit from MAS measures, as small mid cap stocks with decent liquidity that are trading at compelling valuations should garner more attention.

• Top Picks in the Small Mid Cap Space
  Our top picks in the small mid cap space include:
  • ComfortDelgro – Expect strong acquisition-led earnings growth in 2024 and 2025.
  • CSE Global – Healthy performance backed by strong order book and attractive dividend yield of approximately 6%.
  • China Sunsine – Global leader in rubber accelerators with attractive dividend yield of approximately 6% and net cash at approximately 70% of market cap.
  • Centurion – Solid volume and rental growth expected in 2025.
  • Digital Core REIT – Beneficiary of robust demand for data centres with attractive valuations compared to peers.
  • Marco Polo Marine – Earnings boost expected from a new fleet of vessels and shipyard expansion from Apr 25.
  • Propnex – Beneficiary of tailwinds in the residential property industry and potential special dividends.
  • Riverstone – Global leader in high-end cleanroom gloves with a dividend yield of approximately 7%.
  • Singapore Post – Value unlocking and cost rationalisation initiatives aimed at enhancing shareholders’ value.
  • Valuetronics – Contributions from GPU leasing business and attractive dividend yield of approximately 7.5%, with net cash at approximately 70% of market cap.

This strategic selection is aligned with the anticipated liquidity boost from MAS, making these stocks promising investment opportunities in the small mid cap space.

Thank you