Singapore stocks: Once bitten, twice shy

[weijian]

Once there are fees to be earned, suddenly 100 GPs appear to sign up their interest in investing in local SGX small/med caps (mind you, not the large ones like the 3 banks and TLCs). This first batch of 3 GPs are all related/interconnected and suggests MAS is been conservative as it starts the EQDP. It also make sense to stagger the GP selection into different phases.

In addition to EQDP, there is also more money thrown at coming up with research pieces and listing of SDRs/ETFs on SGX (primarily giving a free ride to SGX).

Finally, consultations will happen towards the end of 2025 to collect suggestions to improve minorities protection/legal recourse. SIAS may be playing a much much bigger role in future, we hope.

MAS Appoints First Batch of EQDP Asset Managers; Commits S$50 million to Boost Equity Research and Product Listings; and Outlines Proposals to Enhance Investor Recourse

3. Since the announcement of the EQDP in February, MAS has received strong interest from the asset management industry in the programme, with indications of interest from over 100 global, regional and local asset managers. MAS is reviewing the submissions in batches to speed up the asset manager appointment and capital deployment process.

4. MAS has appointed the first three asset managers under the EQDP, and will place a combined initial sum of S$1.1 billion with them, out of the total S$5 billion that has been set aside for EQDP. The asset managers are:

Avanda Investment Management
Fullerton Fund Management
JP Morgan Asset Management

6. MAS is reviewing the remaining submissions and will appoint additional asset managers to manage the remaining funds under the S$5 billion EQDP[3]. The next phase of selection is expected to be announced by 4Q 2025. By investing with a broad range of fund managers employing varied strategies, the EQDP can leverage their distinct investment expertise and distribution networks to attract commercial capital and strengthen market vibrancy. This will help to improve price discovery and trading liquidity in Singapore’s equities market.

Additional funding of S$1,000 for each research report, with a further S$1,000 if the report is an initiation of research coverage[5] or covers pre-IPO stage and newly-listed companies. This brings the maximum funding from S$4,000 (current) to S$6,000 (enhanced) per research report[6]. This enhanced funding aims to boost investor awareness and trading interest in under-researched segments, particularly small- and mid-cap enterprises.

A new funding sleeve to cover Singapore Depository Receipts (SDRs) and foreign Depository Receipts (DR) with underlying Singapore stocks, providing S$40,000 per DR issuance. This aims to increase overall trading interest and liquidity in Singapore, while broadening the global investor base for Singapore equities.

Increasing the overall funding per primary listed ETF, from S$100,000 to S$250,000. A new funding sleeve will also support cross-listed and feeder ETFs at S$180,000 per listing. This will facilitate more ETF listings in Singapore, adding to the range of listed investment products to provide more investor choice.

10. Facilitating investors to seek civil recourse is therefore important to bolstering investor confidence, maintaining market integrity and upholding the reputation of Singapore’s capital markets. In doing so, there is also a need to address concerns of frivolous legal actions that would unduly burden the market, by putting in place appropriate safeguards. In line with the Review Group’s guidance, MAS has identified three areas of focus and will consult on proposals later this year:

https://www.mas.gov.sg/news/media-releas...t-managers

[CY09]

"Additional funding of S$1,000 for each research report, with a further S$1,000 if the report is an initiation of research coverage[5] or covers pre-IPO stage and newly-listed companies. This brings the maximum funding from S$4,000 (current) to S$6,000 (enhanced) per research report[6]. This enhanced funding aims to boost investor awareness and trading interest in under-researched segments, particularly small- and mid-cap enterprises."

Anyway Valuebuddies can amalgamate our threads for many of our SGX listed companies into 01 research report : ). We have so many information on small mid/small cap companies, easily can monetise the 4k-6k per research reports

On the other hand, the consultation on protecting minority interest is a good avenue and I hope knowledgable members here can submit to MAS views/recommendations. MAS is rather transparent on the pointers it receives and it will elaborate why their final paper dont support or support it

[opmi]

Incentives lead to increase in quantity of reports. How to verify the quality of the reports?

https://www.corporate-rebels.com/blog/leaders-rules

[Dosser]

Market has been steadily climbing for a month, also seeing strength in the non-index stocks. Apart from the MAS angle, suspect a lot of it is due to the precipitous fall in T-Bill yield. Decent dividend paying stocks are looking relatively much more attractive, although the option of topping up the other half's CPF retirement account is  also tempting.

[weijian]

Incentives lead to increase in quantity of reports. How to verify the quality of the reports?

https://www.corporate-rebels.com/blog/leaders-rules

Whether sell-side or buy-side reports, and regardless of the quality of those reports (which is unfortunately quite subjective for a start), I suppose that the net effect will contribute towards making the Spore equity market less inefficient.

As an investor, do we prefer more efficient or more inefficient markets? Of course, perennial inefficiency is not that desirable because been right early and wrong are not quite dissimilar. An investor of inefficient markets only make their risk-adjusted gains when Mr Market becomes more efficient, ie. Mr Market correcting his/her error.

As a durian lover, do we prefer more expensive or less expensive durians? If we are eating more, we want cheaper (and tastier) durians.  But if one day we decide to go upstream (as many durian lovers have done) and start selling what we love, we surely want more expensive durians (p.s. durian retailers generally earn a fixed margin as % of MSRP, just like how TheHourGlass sells their timepieces).

We can only accept what (or what we think) is coming to us. And then adjust our style accordingly.

[Big Toe]

Research Reports

On the Quantitative side one can do no wrong if one is diligent enough.
However I do find it harder to get data that is pre internet era.
And usually I am most interested in companies with a reasonably long and rich history.

On qualitative research. This is where many analyst fail and some of us may have an edge.
Analysts do not run the business and have little knowledge of how the business works within a particular industry.
And the ones that have decades of experience are usually surprisingly enough uninterested to invest in their own industry.
(Grass is greener on the other side perhaps?)