Singapore Stock Market Revival Gathers Momentum

Photo Credits: Singapore Exchange (SGX)

For years, Singapore’s equities market has laboured under the weight of criticism—described as moribund and overlooked by investors seeking excitement elsewhere in the region. Yet 2025 has marked a decisive turning point. The Straits Times Index (STI) has surged to record highs, trading above 4,600 points and delivering remarkable returns that have caught the attention of institutional and retail investors alike. What began as tentative optimism has crystallised into tangible evidence that the Singapore stock market revival is taking hold, driven by a potent combination of government-backed liquidity initiatives, renewed investor interest, and the city-state’s inherent appeal as a geopolitical safe haven.

Government-Backed Liquidity: The EQDP Programme

The catalyst for this awakening has been unmistakably structural. In February 2025, the Monetary Authority of Singapore (MAS) announced the Equity Market Development Programme (EQDP), a S$5 billion initiative designed to inject liquidity into the market and specifically support small and mid-cap securities. This wasn’t merely a symbolic gesture; by November 2025, nearly S$3.95 billion had been allocated to fund managers with explicit mandates to invest in the underexplored corners of the Singapore equities universe. The programme’s design signals confidence that market participants have been overlooking genuine value in the locally-listed space. For investors accustomed to viewing Singapore as a passive dividend-yielding market, the EQDP represents a provocative shift toward active engagement with growth-oriented mid-cap opportunities.

IPO Revival: A Return to the Market

The evidence of revival extends beyond index performance. Initial Public Offering (IPO) activity, long dormant on the Singapore Exchange, has rebounded sharply. Where 2024 saw merely four listings raising US$34 million, 2025 delivered nine transactions totalling approximately US$1.6 billion—making Singapore the leading Southeast Asian bourse for IPO proceeds this year. Marquee names such as NTT DC REIT, backed by Singapore’s sovereign wealth fund GIC and Japan’s Nippon Telegraph and Telephone Group, raised more than US$500 million and marked the largest REIT listing on the Singapore Exchange in a decade. The SGX’s current pipeline contains more than thirty companies actively preparing listing applications, signalling that momentum is likely to persist into 2026 and beyond.

The Liquidity Challenge: A Critical Concern

Yet this revival, though tangible, remains fragile. Liquidity—the lifeblood of any functioning equities market—remains substantially below levels observed in neighbouring markets. Daily trading volumes on the SGX average approximately S$1.5 billion, a figure that pales in comparison to Malaysian, Thai, or Australian bourses. More concerning, trading activity contracted noticeably in the latter months of 2025, declining from 38.6 billion shares traded in September to 29.3 billion in November. This pullback raises legitimate questions about whether the EQDP alone possesses sufficient firepower to sustain the uptrend over a prolonged period. Unlike mature markets sustained by continuous flows from domestically-domiciled pension funds and sovereign wealth vehicles, Singapore relies on periodic policy interventions to generate momentum.

Compelling Valuations and Dividend Appeal

From a valuation perspective, the Singapore stock market revival rests on compelling fundamentals. The STI offers exceptional dividend yields—averaging between 4 and 5.5 per cent across major sectors—substantially higher than dividend yields available in most developed or emerging market comparables. The Financials sector, representing over half the index’s market capitalisation, continues to benefit from regional banking consolidation and elevated net interest margins. Real estate investment trusts (REITs), accounting for 15.6 per cent of index weighting, offer defensive characteristics and distribution yields ranging between six and seven per cent, particularly attractive amid macroeconomic uncertainty. Crucially, the STI trades at valuations that remain disciplined relative to historical averages and regional peers. A forward Price-to-Earnings ratio of approximately 11.3x to 12.4x—depending on broker assumptions—positions Singapore as attractively valued compared to technology-heavy markets that have experienced pronounced re-rating in recent years.

Geopolitical Safe Haven Status

The broader investment narrative extends beyond yielding stocks. Structural factors reinforce Singapore’s appeal. The city-state’s position as a financial hub in an era of geopolitical fragmentation has never been more valuable. Global investors, confronting uncertainties ranging from US-China trade tensions to Middle East volatility, increasingly view Singapore as a haven combining economic resilience, political stability, and macroeconomic prudence. The Singapore dollar has appreciated approximately four per cent against the US dollar in 2025, offering natural currency protection. More fundamentally, Singapore’s AAA-rated sovereign debt, disciplined fiscal management, and world-class regulatory frameworks position the nation as a destination for capital seeking exposure to Asia without accepting excessive geopolitical or governance risk.

Sector Rotation: Beyond Traditional Blue Chips

The sectors driving the Singapore stock market revival reveal sophisticated investor positioning. Whilst banks and blue-chip stocks led initial gains, institutional capital has begun rotating towards mid-cap names and defensive sectors. Telecommunications and utilities stocks, benefiting from essential service characteristics and dividend sustainability, have attracted sustained interest. Data-centre REITs have emerged as beneficiaries of artificial intelligence infrastructure demand, positioning Singapore alongside Hong Kong and Tokyo as regional hubs for digital infrastructure investment. Even consumer staples and property developers, long considered pedestrian, have attracted renewed attention as investors recognise that the Singapore market offers genuine alpha generation possibilities within a low-volatility, high-income framework.

Structural Obstacles and Reform Proposals

However, recognising challenges remains essential for understanding whether the Singapore stock market revival can transition from cyclical rally to secular re-rating. Depth of market participation remains narrow. Whilst the STI’s top-tier constituents enjoy reasonable liquidity, the broader universe of Singapore-listed equities suffers from research undercover, inadequate analyst follow, and limited visibility among international asset allocators. The recent recommendation from the Equities Market Review Group that Singapore brokers be permitted to offer custodial services—currently a monopoly held by the Central Depository Board—reflects acknowledgement that structural impediments to market participation remain. Similarly, proposals to create mid-cap exchange-traded funds (ETFs) and to reduce profitability thresholds for IPO applicants signal that authorities recognise broader architectural improvements are necessary.

The Path Forward: Three Critical Factors

Looking forward, the sustainability of the Singapore stock market revival hinges upon three critical factors. First, EQDP fund deployment must persist at sufficient velocity to prevent liquidity from reverting to historical lows. MAS has indicated that substantial tranches of capital remain to be deployed, with a third batch of fund manager appointments anticipated in the second quarter of 2026. The sequencing and magnitude of these deployments will critically influence whether the programme generates durable market-structure improvement or merely temporary price momentum. Second, Singapore must attract meaningful listings beyond the REIT and real estate sectors that have dominated 2025 activity. Growth-oriented companies across technology, advanced manufacturing, and sustainability-linked ventures will be essential to broaden investor appeal beyond yield-seekers. Third, the global macroeconomic environment must remain sufficiently uncertain that investors continue viewing Singapore as a critical component of diversified, defensive portfolios.

Conclusion: An Inflection Point, Not a Transformation

The Singapore stock market revival of 2025 represents neither the vindication of traditional views of Singapore as an inevitable wealth hub nor a sustainable secular re-rating that eliminates long-standing concerns about market depth and breadth. Rather, it constitutes an inflection point—a moment at which authorities and market participants have simultaneously acknowledged that structural renewal is imperative and begun implementing reforms sufficient to generate tangible improvement. For investors, the question is not whether the Straits Times Index will reach new highs in absolute terms; it almost certainly will, supported by persistent dividend yields and geopolitical safe-haven demand. The substantive question concerns whether the Singapore stock market revival will evolve into something more transformative: a market genuinely characterised by broad participation, robust research coverage, and sufficient depth to become a first-choice destination for regional capital allocation. The coming two years will provide the answer.