Stocks & Such – Singapore Exchange Limited (SGX)
3E Accounting offers a quick read about the trending Singapore Exchange Limited (SGX).
The Singapore Exchange Limited (SGX) is a dynamic, full-service entity that operates on many tiers. It has diversified into a few areas, including market data, trading, settlement, custody, and clearing. Located in Singapore, it also wholly owns the Singapore Commodity Exchange Ltd (SICOM), Asian Gateway Investments Pte Ltd, and Central Depository Pte Ltd. These subsidiaries provide a variety of facilities, including settlement services, securities clearing, and depository services.
As an investment holding company, the SGX trades in both Singapore dollars as well as US dollars. It handles foreign currency exchange, stocks, bonds, securities (SGX ST), derivatives (SGX DT), fixed income, and commodities. It also provides electronic global trading access via SGX ETS and SGX Reach.
The SGX’s market capitalization as of 2017 stood at Singapore Dollar 1 trillion, making it one of the largest stock market exchanges in Southeast Asia. It has equity stakes in the Bombay Stock Exchange and owns 20% of the Philippine Dealing Systems Holdings Corp. SGX has equities in the London-headquartered Baltic Exchange and has entered into a partnership with Nasdaq OMX.
Companies are listed on the SGX via the following platforms:
- SGX Mainboard: as of 2019, it has 640 listings. Listed companies must fulfil SGX requirements such as listing via Initial Public Offering (IPO), etc.
- SGX NASDAQ: no additional requirements for listing.
- SGX Catalyst: formerly known as SESDAQ, it has 215 listings as of 2019. Catalyst provides equity financing. It determines potential listable companies based on a sponsor system. Also functions as a corporate advisor on corporate governance and listings.
The SGX was established in 1999 as an amalgamation of three entities. These were the Securities Clearing and Computer Service Pt., Stock Exchange of Singapore, and the Singapore International Monetary Exchange. It soon became a member of the World Federation of Exchanges and, in 2008, acquired the Singapore Commodity Exchange.
On a Positive Note
As of 2018, it has 750 listed companies and has international representative offices in Beijing and London. The SGX holds the accolade of being Asia-Pacific’s third listing behind Hong Kong and Australia. It was recently listed on the Bloomberg Gender-Equality Index (GEI).
To invest in the SGX, you will need to engage a retail broker to help you set up two basic accounts. Setting up these accounts is free provided the minimum requirements are met, i.e., not an undischarged bankrupt and aged 18 or above. These are:
- A Central Depository or CDP Account: managed by the SGX, it keeps all bought shares safe.
- A Trading Account: managed by the brokerage of your choice. Provides access to trade on the securities market. It is possible to have multiple trading accounts.
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