Budget 2026 may have just lit a fire under Singapore’s stock market.
With Budget 2026 expanding the Equity Market Development Programme (EQDP) to S$6.5 billion, Singapore equities are set to receive another round of institutional backing.
We had earlier covered the launch of the S$5 billion EQDP, and concluded that while the stimulus was a massive vote of confidence for the Singapore Exchange (SGX), the real benefits for dividend-seekers would be gradual.
However, Budget 2026’s announcement has shifted the narrative into high gear. The Singapore government isn’t just staying the course; it’s doubling down.
By injecting an additional S$1.5 billion into the program, the total commitment now stands at a staggering S$6.5 billion.
For retail investors, this expansion isn’t just about more money, it’s about the “Next 50” revolution finally gaining the fuel it needs.
The “Demand Surge”: Why the Government Expanded the Fund
When the EQDP was first introduced, skeptics wondered if there would be enough appetite from institutional fund managers to focus purely on Singapore equities. The answer, according to the Monetary Authority of Singapore (MAS), is a resounding “yes.”
MAS reports that the initial S$3.95 billion has already been allocated across nine top-tier asset managers, including giants like JPMorgan and local powerhouses like Fullerton. The decision to expand the fund by 30% indicates a “robust pipeline” of high-quality applications. Professional money is eager to move into the Singapore market, and the government is providing the liquid oxygen to sustain that fire.
Where Will the Money Flow? Follow the “Next 50”
If you want to know where this S$6.5 billion is headed, look no further than the iEdge Singapore Next 50 indices.
As we recently highlighted, these indices track the 50 largest companies after the STI blue chips.
These indices have already been outperforming the STI, and for good reason.
They capture the “Goldilocks” zone of the Singapore market: companies large enough to be stable, but small enough to offer significant growth and higher yields.
While the STI offers a yield of around 4.1%, the Next 50 index has hovered near 5.85%.
With the EQDP expansion, fund managers are explicitly tasked with anchoring capital in these mid-cap gems. This creates a “Flywheel Effect”:
- Capital Inflow: EQDP-funded managers buy into Next 50 constituents.
- Improved Liquidity: Trading volumes rise, making it easier for large institutions to enter.
- Valuation Re-rating: Higher demand drives up stock prices, narrowing the valuation gap between mid-caps and blue chips.
Stock Watch: The Potential Beneficiaries
The “Next 50” list is home to several quality names that are now in the spotlight.
- The Infrastructure Plays: NetLink NBN Trust (SGX: CJLU) and ComfortDelGro (SGX: C52) are prominent weights in the new index. Their steady cash flows make them prime targets for managers looking for stability combined with the EQDP’s growth mandate.
- The REIT Tier: While the STI has the giants, the Next 50 holds the “reserve list” stars like Suntec REIT (SGX: T82U) and Keppel REIT (SGX: K71U). These are often the first to benefit when institutional liquidity pours into the mid-cap space.
- The New Economy: With the inclusion of iFAST Corporation (SGX: AIY) and NTT DC REIT (SGX: NTDU), the stimulus is also supporting Singapore’s pivot toward digital infrastructure and wealth platforms.
The Catch: Profits Still Rule Payouts
Despite the excitement, we must reiterate our core mantra: Dividends are paid from earnings, not government sentiment.
A S$6.5 billion stimulus can lift a stock’s price, but it doesn’t automatically fix a struggling business model.
For income investors, the goal is to find companies that use this newfound liquidity to strengthen their balance sheets or fund strategic growth.
A higher stock price is great, but a sustainable, growing dividend is what builds long-term wealth.
Get Smart: Positioning for Mid-2026
Government support can improve market confidence and create a rising tide for equities, especially as new fund managers are appointed in mid-2026.
The expanded EQDP will help revive the domestic ecosystem, broaden participation, and shine a much-needed spotlight on the high-yielding Next 50 universe.
While the stimulus provides the backdrop for a market recovery, our job as investors is to identify the businesses that can grow their earnings and sustain their payouts long after the initial stimulus fades.
Don’t let market uncertainty hijack your financial dreams. While headlines scream gloom, 5 Singapore companies have been quietly building wealth and paying reliable dividends. You’re probably overlooking them. Discover these resilient giants and their secrets to sustained income, even through global storms. Click here to download your free report now and secure your financial future!
Follow us on Facebook, Instagram and Telegram for the latest investing news and analyses!
Disclosure: Joanna Sng owns shares of iFast Corporation and NTT DC REIT.
