Singapore stock market

The Singapore stock market revolves around one single stock exchange, the Singapore Exchange Limited (SGX). The Singapore Exchange Limited is the result of a merger between the Stock Exchange of Singapore (SES) and the Singapore International Monetary Exchange (SIMEX) which took place in December 1999.

The Singapore Exchange is Asia-Pacific's first demutualised and integrated securities and derivatives exchange. A majority of the revenue comes from the securities market, while the derivatives market brings in less than 30 percent.

The Singapore stock market and the Straits Times Index

If you want to gain a deeper understanding of the Singapore stock market, you should definitely take a look at the Straits Times Index (STI). The Straits Times Index is a market value-weighted stock market index based on stocks from 50 representative companies that are listed on the Singapore Exchange.

The Straits Times Index is the creation of Professor Tse Yiu Kuen from the Singapore Management University together with the Singapore Exchange and the Singapore Press Holdings. It s reviewed at least once a year, and ad-hoc reviews are also carried out. The Straits Times Index is an important tool for anyone interested in the Singapore stock market and was launched in the aftermath of an important sectoral re-classification of listed companies. During this re-classification, the “industrials” category was removed and the Straits Times Industrials Index (STII) was consequently replaced by the Straits Times Index. Trading began at 1 September 1998 at 885.26 points, based on the old Straits Times Industrials Index. At this point, it represented 78 percent of the average traded value per day over a one year period. It also represented over 60 percent of the total market capitalisation on the Singapore stock exchange.

The Singapore Exchange – together with Singapore Press Holdings and London's FTSE Group – have announced that the Straits Times Index will undergo a significant overhaul by the end of 2007. During this overhaul, the components of stock is planned to be decreased from 50 to 30, and 18 new indices will probably be formed. This is naturally important news for anyone with interests in the Singapore stock market.

This is the formula used to calculate the Straits Time Index:
$I_t = \frac { \,^{P_n} P_t Q_t W_t} {D_t}$

It = Index
PN = Summation over N stocks
Pt = Price
Qt = Number of shares issued
Wt = Weight (dependent on free float, usually equals 1)
Dt = Divisor

Singapore stock market alliances

The Singapore Exchange, the only major exchange on the Singapore stock market, has entered into several strategic alliances. SGX has made a strategic (5%) investment in the Bombay Stock Exchange for US$ 42.7 millions, as a part of its plan of building an Asian Gateway for derivatives and securities. The London Stock Exchange plays a key role in a future Euro-Asian Gateway and is currently addressing SGX as its major strategic partner in Asia. There is also a collaboration agreement between the Singapore Exchange and the Abu Dhabi Securities Market in the United Arab Emirates. In addition to this, the Tokyo Stock Exchange has purchase a 4.99% stake in the Singapore Exchange for US$ 303 million (37.4 billion yen).

If you found this page useful please consider linking to it from your website or blog.

_________________________________________________________________________________