How to Invest in the Singapore Market and Stocks

Singapore’s stock market needs no introduction. One of the strongest economies in the world, with incredible first-world infrastructure comparable, or even way better than some equally-leading economies, the Singapore stock market is needless to say, a brilliant place for you to invest your dough.

Singapore Stock Market

The Singapore stock market is a great place for you to invest your hard earned money. With over 775 listings on this stock exchange there is a wide variety of equities for you to invest in. To get going to you need to find a broker.

You can easily find a list online and once you have found a reputable broker they will help you to set up the two trading accounts you need to start trading equities. Once your accounts are set up your broker will buy and sell equities on your behalf. You can buy your first equity in Singapore either over the phone by calling your broker or online.

If you are trading equities online you can access the page to send buy or sell orders by going to your brokerage’s website. From here you can login securely with your password and account number and place your instructions to trade. Once you have entered the information and checked it is correct you can confirm the trade and you have completed your first equity trade! Suddenly, you’ll realise that it is nowhere near as complicated as you thought it would be.

It really is that simple. However, you still need to be careful when entering the order – despite how sounds people often click buy when they mean sell, or forget to put in the decimal point when inputting a number – S$5.00 is a whole lot different to S$500!  So it pays not to take for granted how simple it seems.

Singapore Stock Exchange

The Singapore Exchange (SGX) has a number of different departments.  The SGX ETS (Electronic Trading System) provides trading access across the globe – 80 percent of the customers on this system are from outside Singapore. In addition the SGX ST system is for securities trading and this is where equity trading takes place.  The Singapore stock market is open 9am to 500pm through the trading day – there is no lunch hour so you can trade anytime during these hours. The trading on the Singapore stock market is through a continuous system of matching buyers and sellers through the trading day with an opening auction of price matching at 830am to 859am and a closing auction at 5pm to 506pm. The minimum quantity for buying equities on the Singapore stock market is 100 shares – this minimum quantity is called a ”lot”. 1 lot in the Singapore stock market is a hundred shares.  Keep in mind that another benefit of investing in the Singapore stock market is that there is zero capital gains tax. This means if you buy shares and the price goes up and you then sell those shares for a profit then you will not be taxed on these profits.

Indices

The FTSE Straits Times Index (STI) is one of the biggest stock market indices for investing in the Singapore market. It is the benchmark index for the Singapore stock market and gives the performance of the largest 30 companies listed on the Singapore Exchange. The index covers a broad range of indices.

Segregation of Singapore Market

Stocks listed on SGX belong to one of two classifications. There is the SGX Mainboard and the SGX SESDAQ. The mainboard has a number of listing criteria set by SGX about the size, riskiness and length of operation of a business. However, a listing on SESDAQ is not tied to any additional conditions and is considering riskier than the mainboard by investors. This can mean a better return compared to the mainboard but comes with greater risk.

Popular Singapore Shares

The biggest company for stock trading in Singapore is SingTel – a telecommunications company that makes up 7.33% of the mainboard trading value and currently trades at a share price of $S 3.88. (16 March 2015)

Sectors in Singapore Stocks Exchange 

The biggest sectors for investing in Singapore are technology, banking and financials, construction and chemicals companies. When it comes to actually choosing which equity you want to buy first you will want to do some research. A good place to start is to look for companies within sectors that you have some experience or knowledge of.

Also keep in mind that each time you buy and sell shares your broker will charge a fee – this is called commission. This will be either a % on the value of your trade or a minimum charge if your trade is too small in size.  For a large, efficient broker expect this commission charge to be around 0.18-0.28%% of your trade size, with a minimum charge typically around $25.

When you have made your first trade you will get a confirmation email for your records – detailing your transaction and showing you where it is recorded in your account. This is sent from the Central Depository (Pte) Ltd (CDP).The CDP is the agency in charge of all Singapore securities accounts and maintains a centralised national record of all stock holdings.

Overall investing in the Singapore stock market can be a simple and effective investment for your money.