Discover SGX: An Introduction to Investors

October 3, 2023

The Singapore Exchange Limited (SGX: S68) stands as one of Asia’s leading and most dynamic stock exchanges, offering a diversified portfolio of products covering equities, fixed income, derivatives, and commodities.

For global investors, SGX represents an enticing gateway to not only Singapore’s growing economy but also to the burgeoning markets across Asia.

This is the first series of articles on “Discover SGX”, where we aim to provide a comprehensive overview of SGX and shed light on its myriad opportunities to the international investment community.

Overview of SGX

Established in 1999, following the merger of the Stock Exchange of Singapore (SES), Singapore International Monetary Exchange (SIMEX) and Securities Clearing and Computer Services Pte Ltd (SCCS), SGX operates as a multi-asset exchange.

Its primary role is to provide a platform for buying and selling securities, including stocks, bonds, and derivatives, making it a central hub for capital flow in the region.

Singapore’s strategic geographical location, at the crossroads of major trade routes, has contributed significantly to SGX’s prominence.

The city-state serves as a nexus between the East and West, fostering a diverse and cosmopolitan environment conducive to business and trade.

SGX, therefore, attracts a plethora of international companies looking to list and raise capital.

Below is the growing global network of subsidiaries and joint ventures of SGX that enriches its multi-asset offerings, delivering innovative investment and risk management solutions to global investors.

Key Features of SGX

1. Diverse Product Offering

SGX offers a wide range of products including equities, fixed income, derivatives, and commodities. This diversity allows investors to tap into various sectors and asset classes, thus enabling a well-rounded portfolio allocation.

2. Robust Regulatory Framework

Singapore’s strong rule of law and stringent regulatory framework underpin the operations of SGX. The Monetary Authority of Singapore (MAS) oversees the regulation of SGX, ensuring transparency, security, and integrity in the market, which in turn instils confidence among global investors.

3. Accessibility and Connectivity

With advanced technological infrastructure, SGX offers seamless connectivity and accessibility to international investors. The exchange has implemented cutting-edge trading technologies and platforms, allowing for high-frequency trading and direct market access.

4. Indexes and Indicators

SGX hosts several indices, including the benchmark Straits Times Index (STI), which tracks the performance of the top 30 companies listed on the exchange.

These indices serve as key indicators of market trends and are essential tools for investors in making informed investment decisions.

The bourse operator has also been very active as SGX welcomed the listing of CSOP iEdge Southeast Asia+ TECH Index ETF.

This ETF offers investors access to the digital technology sectors in India and Southeast Asia.

In August this year, SGX saw the introduction of the CGS Fullgoal Vietnam 30 Sector Cap Index ETF.

Starting with S$35 million in assets under management (AUM), this ETF offers investors access to the fast-growing Vietnam market.

Investment Opportunities

1. Equities Market

The equities market is a significant segment of SGX, with over 700 companies listed, offering a wide range of investment options. These companies hail from various sectors, such as finance, healthcare, real estate, and technology, providing ample opportunities for portfolio diversification.

2. Derivatives Market

SGX’s derivatives market is one of the most vibrant in the region, offering futures and options on interest rates, equity indices, foreign exchange, and commodities. The exchange is a global leader in derivatives trading, particularly in Asian equity index derivatives.

3. Fixed Income and Bonds

SGX provides a platform for the listing and trading of fixed-income securities, including government and corporate bonds. The availability of various bond offerings allows investors to invest in stable and reliable income streams.

4. Commodities

SGX has developed a robust commodities trading segment, focusing primarily on energy, metals, and agricultural products. This segment allows investors to hedge against price fluctuations and to diversify their portfolios.

SGX stands as the gateway to tap into the growth potential of Asia

For global investors looking to tap into the growth potential of Asia, the Singapore Exchange (SGX) stands as a compelling proposition.

With its diverse product offerings, robust regulatory framework, and strategic geographical location, SGX serves as a gateway to the vibrant markets of the region.

By exploring the various investment opportunities available on SGX, investors can leverage the dynamic landscape of Asia and achieve a well-rounded and diversified portfolio.

Disclaimer: ProsperUs Head of Content & Investment Lead Billy Toh doesn’t own shares of any companies mentioned.

Billy Toh

Billy is deeply committed to making investment accessible and understandable to everyone, a principle that drives his engagement with the capital markets and his long-term investment strategies. He is currently the Head of Content & Investment Lead for Prosperus and a SGX Academy Trainer. His extensive experience spans roles as an economist at RHB Investment Bank, focusing on the Thailand and Philippines markets, and as a financial journalist at The Edge Malaysia. Additionally, his background includes valuable time spent in an asset management firm. Outside of finance, Billy enjoys meaningful conversations over coffee, keeps fit as a fitness enthusiast, and has a keen interest in technology.

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