Can the Government’s Equity Stimulus Really Boost Dividends for Retail Investors?

Group 1: Overview of the EQDP - The Equity Market Development Programme (EQDP) is a S$5 billion initiative aimed at revitalizing Singapore's equity landscape and increasing investor interest in local equities [1][3] - The programme is spearheaded by the Monetary Authority of Singapore (MAS) and the Financial Sector Development Fund (FSDF) [3] - EQDP focuses on strategies managed by Singapore-based asset managers, particularly those investing in small- and mid-cap companies [4][5] Group 2: Impact on Corporate Dividends - While EQDP aims to deepen market liquidity and support local companies, its direct impact on dividends is limited [6][21] - Companies benefiting from the EQDP may prioritize reinvestment, debt repayment, or share buybacks over immediate dividend increases [7][18] - Stronger profitability resulting from EQDP could lead to more sustainable dividends in the long term [8][23] Group 3: Beneficiary Sectors and Companies - The EQDP is expected to favor sectors such as technology, financials, infrastructure, and green energy [9] - CSE Global Limited reported an 8.5% increase in net profit for 1H2025, but its order book declined by 17.1% [10] - Singapore Exchange (SGX) reported record revenue and net profit for FY2025, with total dividends increasing to S$0.375 per share [12] - ESR-REIT showed a 22.7% YoY increase in gross revenue for 3Q2025, with a dividend yield of 7.9% [13] - DBS Group Holdings declared a record ordinary dividend of S$2.22 per share for 2024, with plans for additional quarterly dividends in 2025 [15][16] Group 4: Investor Considerations - Investors should focus on companies with a proven dividend track record and strong cash flow visibility, as dividends depend on business fundamentals rather than government aid [22][23] - The EQDP is likely to improve market sentiment and valuations, but dividend gains may be gradual as companies prioritize reinvestment [21][22]