Amova has become a substantial shareholder in Valuetronics (SGX:BN2), Frencken (SGX:E28) and UMS (SGX:558), investing nearly $70 million and crossing the 5% threshold in all of these 3 stocks.
This is clearly part of a broader strategic move into the tech manufacturing sector, against a backdrop of strong semiconductor-related demand in Singapore’s technology manufacturing space. It could also be a play on a upcoming potential recovery and growth into the Sector.
Why is Amova acquiring Singapore stocks?
Singapore’s equity market offers robust dividend yields, a core component of total returns for investors. Over the past three years, more than a third of Singapore’s equity returns have come from dividends, outpacing global benchmarks.
Amova intends to actively manage its positions to capture both dividend yield and dividend growth, ensuring investors benefit from rising payout ratios and resilient income streams, even as earnings growth moderates.
The Singapore market is undergoing a transformation, driven by policy initiatives such as the Monetary Authority of Singapore’s (MAS) Equity Market Development Programme (EQDP).
With S$5 billion earmarked to invigorate the market, the focus is now on small-cap stocks. This segment has historically lagged in liquidity and investor attention. Amova will actively identify and invest in small caps with strong fundamentals, unlocking new avenues for growth and diversification.
Amova is also one of the six asset managers appointed by the MAS for the second batch of funds disbursed under the EQDP. The total allocation under this second batch of funds amounts to $2.85 billion, more than double the $1.1 billion allocated in the first batch.
Who is Amova?
Amova Asset Management was formerly known as Nikko Asset Management. The name change was part of a rebranding and refocusing. Nothing else changed.
Amova said that it would be launching two funds in the first quarter of 2026 with the funds from the EQDP – a broader fund called the Singapore Dividend and Growth Equity Fund (SDGF) and a more focused fund called the Singapore Small Mid Cap Equity Fund (SSMID).
The SDGF is a Singapore All Share Strategy that seeks diversified broad-based Singapore equity exposure; while the SSMID is an alpha-seeking fund that focuses on emerging opportunities.
It is worth noting that, according to its prospectus, Amova may invest SDGF’s funds into SSMID (but not the other way around).
Amova is currently the only fund manager to commit to two strategies under MAS’s EQDP scheme.
Who will Amova invest in next?
At the risk of sounding like a broken record, the mandate under the EQDP is to support local fund management and increase active investment in Singapore equities, particularly in the small and mid cap space.
Therefore, it is all but certain that the next investments will likely be from the iEdge Singapore Next 50 Index which tracks the performance of the next 50 largest companies listed on the SGX Mainboard, beyond the 30 largest companies by market capitalization.
By looking at the SGX Next 50, Amova is fishing in a pond where liquidity is sufficient for institutional entry but with still enough allowance for alpha generation.
Of the 3 stocks that Amova has invested in so far (Frencken, Valuetronics and UMS), 2 are part of the Next 50 Index, with Valuetronics the only stock not part of the index. Notably, all three stocks have delivered strong performance over the past month, with gains ranging from about 19% to 24%.
While it is entirely possible that Amova will consider smaller-cap stocks that fit the strategy of either fund, to keep things focused here, we will look at the Next 50 Index to identify possible plays.
We think possible candidates, in order of likelihood, would be BRC Asia, CSE Global, Comfort DelGro, PropNex and Value Max.
Of the possible candidates, the first 2 are more likely plays, (in our opinion) aligned with Amova’s recent investment pattern. They are looking for companies dominant in their segments/niches. CSE Global provides mission-critical automation and telecommunications integration, while BRC Asia is the leader in Singapore’s steel reinforcement industry. It is worth noting that HG Metal, while not in the Next 50 is in a similar niche and has the same substantial shareholder as BRC Asia.
Comfort DelGro, PropNex and Value Max are also niche plays that have carved out a dominant position in their respective areas.
These companies also trade at a discount relative to the usual STI stocks, presenting an opportunity to buy into potential energy transition and infrastructure themes.
Closing statements
The Straits Times Index outperformed many other stock markets in 2025. Many small caps have ran up even more. While there are laggards in any bull run, sometimes these stocks are laggards for a reason. Although the investment monies from the EQDP is no doubt a sizeable tailwind, it is still safest for investors to select companies based on the their underlying fundamentals.
p.s. if you want to learn how to analyse and find the best stocks to buy, Alvin shares our strategy at this live webinar.
