On the other hand, the team foresees small- and mid-caps to do well, as funds from the equity market development programme (EQDP) are deployed. The second tranche of the $5 billion funds, amounting to $2.85 billion, were placed with six asset managers. Similar to the first tranche, the team expects to see deployment within the next one to two quarters. The funds are also expected to crowd in third-party capital. With this, the team expects liquidity in the market to continue broadening out beyond the FTSE Straits Times 30.
Macquarie Equity Research analysts Jayden Vantarakis, Foo Zhiwei, Rachel Tan and Amanda Foo see 2026 as a “good year” for stock pickers, although they are expecting the benchmark Straits Times Index (STI) to be muted.
The analysts, who have a year-end STI target of 4,500 points, believe the banks — which make up about half of the index — should be a drag rather than driver to the STI’s performance. “Following two years of strong performance, we expect lower interest rates to pressure revenues,” the team writes in their report dated Jan 5.
