MQTrader Education Series
MQ Trader - Seeking for more trading opportunities?
MQTrader Jesse
Publish date: Fri, 06 Aug 2021, 05:26 PM
Seeking for more trading opportunities? Trade in SGX now!
Singapore, the “lion city” which also grows like a “lion” since its independence of 56 years, has become a strong financial center. When the city-state became independent in 1965, 50% of its population was illiterate. Lacking natural resources, Singapore pulled itself up through smart policies and of course being one of the hard working nations, becoming one of the most business and investment friendly country in the world.
Today, Singapore is a thriving trade, manufacturing and financial hub. In this blog, we will talk about the factors that formed Singapore into a global financial centre and why entering into SG market shall give your portfolio of global exposure towards the world’s economy.
Global Financial Centre
Singapore is the fourth largest financial centre globally and the third richest in the world. It’s home to the biggest exchange (FX) centre in Asia-pacific and the third largest worldwide, after New York and London. With these international accolades, it’s little wonder the country is hailed as the de facto financial capital of the Southeast Asian region.
One of the main reasons that Singapore can stand as one of Asia's financial centres is due to its sound, transparent and efficient legal system. Singapore used the same legal system which is British common law system during British colonies. British common law system is in line with the international system.
Investment and Business Friendly Policies
Singapore also benefits from government policies that position the country as open to trade, attract foreign direct investment inflows and that welcome overseas business setting up shop on its shores. This has cemented its position as one of Asia’s top financial hubs, with many multinational corporations already establishing a pivotal presence here.
High Quality Education
In addition, Singapore has many well-educated professionals. In the QS World University Rankings released this year, Singapore was shortlisted 2 University which is National University with ranking 11, and Nanyang Technological University, with ranking 12, making it the two highest ranked universities in Asia. The quality and density of universities are rare in Asia.
World Class Infrastructure
Furthermore, world class airports, ports, and other infrastructures. As the most important facility for international traffic, the international air transport rating organization Skytrax’s 2021 of the world’s best airports show that Singapore’s Changi International Airport ranks first in the world.
Strategic Location
Singapore’s strategic location in the heart of Southeast Asia makes its port a major player that is always bustling with activity. Its proximity to other countries and key markets in the region open many possibilities for investors and businesses based here. In fact, many Chinese and Australian producers and trading houses have major offices in Singapore, boosting its position as the region’s stand out commodities hub.
Singapore has established itself as the world’s busiest port and a top location for investors looking for an economic gateway between the East and the West. Singapore lies within the Malacca Straits, which is one of the most important and busiest transhipment ports in the word world, over the years Singapore has utilized this vital location to become the world’s gateway to Asia.
Global Exposure through Secondary Listings
Speaking of secondary listings, there are many companies that choose to list their company to another market through different stock exchanges as there will be a major benefit where the companies get access to a larger pool of potential investors, which can be beneficial for both business and investors.
Furthermore, secondary listing improves a company’s share liquidity and its public profile as the shares trade in more than one market, increasing the publicity and awareness in the new market. Secondary listing prevents the company from causing saturation of transactions in the single market.
Secondary Listings in SGX
As the Asia Financial Center and the fourth largest global financial center, there are many companies from other countries that choose to do secondary listings in the SGX market. For example:
- Aims Property Securities Fund from Australia Securities Exchange
- AMTD International Inc. from New York Stock Exchange
- Shangri-La Asia Limited from Stock Exchange of Hong Kong
- Courage Investment Group Limited from Hong Kong Exchange
- Dairy Farm Int’l Holdings Ltd from London Stock Exchange
- EMAS Offshore Limited from Oslo Bourse Stock Exchange
- Lonza Group Ltd from SIX Swiss Exchange
- Maruwa Co. Ltd from Tokyo Stock Exchange
- Pan Ocean Co, Ltd. From Korea Stock Exchange
- Sri Trang Agro-Industry Plc from Stock Exchange of Thailand
From the above examples, there are more than 9 different countries' companies that have secondary listings in SGX.
Fun fact: Do you know how many Malaysian companies are listed on the Singapore Stock Exchange?
Answer: Close to 50 companies listed on SGX are either headquarter in Malaysia or have core operations based in Malaysia, such as:
- TOP GLOVE CORPORATION BHD
- IHH HEALTHCARE BERHAD
- GENTING BERHAD
- MALAYSIA SMELTING CORP BHD
Want to venture into a market that has global exposure and diversify your portfolio?
Open trading account now with MQ Trader to start trading in SGX!
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Disclaimer
This article does not represent a BUY or SELL recommendation on the stock covered. Traders and Investors are encouraged to do their own analysis on stocks instead of blindly following any Trading calls raised by various parties in the Internet. We may or may not hold position in the stock covered, or initiate new position in the stock within the next 7 days.
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This book is the result of the author's many years of experience and observation throughout his 26 years in the stockbroking industry. It was written for general public to learn to invest based on facts and not on fantasies or hearsay....
