Close this search box.

A Complete Guide to Investing in SGX-Listed Shares: From Due Diligence to Post-Investment Strategies

SGX trading chart with analysis tools, representing strategic investment in Singapore's stock market

Considering investing in shares listed in Singapore? It’s vital to understand what actions you must undertake before and after you invest, including conducting thorough due diligence and tracking your investments.

Investing in Shares Listed on the SGX

Investing in a company seeking to list on the Singapore Exchange (SGX) can be done through its initial public offering (IPO). Additionally, you can invest in companies already listed on the SGX via a broker. On the SGX, shares are typically traded in board lots of 100. Hence, if a share is priced at $1, you’ll invest $100 in one lot of shares (excluding transaction costs).

Some investors use margin financing for share trading. Leverage trading can be risky and potentially lead to unlimited losses, depending on the positions taken.

Before Making an Investment

Considering the wide range of shares available, it’s worthwhile to conduct due diligence. Spend time researching and shortlisting companies that meet your criteria. To buy and sell shares, you’ll require a Central Depository (CDP) account and a trading account with a brokerage firm.

Deciding on the Shares to Invest In

First and foremost, be clear about your investment objectives, i.e., whether you are accumulating capital or seeking income. Understand your risk tolerance. Build an investment portfolio that is diversified to achieve your desired risk-return profile. Decide how you wish to allocate your capital, which will help you in your search.

Investors might utilize fundamental analysis or technical analysis, or a mix of both, to decide which shares to invest in. Before investing, ensure you are familiar with the company, including its business operations, growth outlook, industry, financial performance, corporate governance, potential weaknesses, and other factors that could affect its performance and share price.

Also, avoid investing in shares or any other investment product based solely on rumors or hot tips.

You May Be Interested

Fundsmith Fund: The Equity Fund with 15-21% Returns (Updated July 2023)

Conducting Your Due Diligence

If you plan to participate in an IPO, it’s important to dedicate time to carefully reading the prospectus. This will provide insights about the company’s operations, potential vulnerabilities, financial performance, valuation, and corporate governance. Similarly, before investing in the shares of a listed company, gather information about it and its performance by reviewing its annual reports, corporate announcements, and other disclosures. These resources can be found on: • The company’s website • SGX’s website • MAS OPERA, which provides prospectuses for share offerings.

Opening a CDP and Trading Account

Before starting your trading journey, you’ll need two accounts: • A securities account with the Central Depository (CDP). This account will hold all the shares you buy on the SGX, and it will electronically record the transactions as they occur. • A trading account with a stock brokerage, which allows you to trade shares in the stock market. Both of these accounts must be linked before you can begin trading.

Fees and Charges

Brokerage commission, usually based on a percentage of the investment amount, will need to be paid to your broker. In addition to the brokerage commissions and other fees levied by brokers, a CDP clearing fee and an SGX trading access fee are also applicable. Keep in mind that GST is charged on all these fees.


Best Investment- Linked Policy Detailed In-Depth Comparison Singapore 2023

Post-Investment Actions

As an investor in today’s complex and ever-changing market, it’s not merely about making the right choices at the investment stage. Ongoing engagement is key. You should regularly monitor your investments to understand how they are performing and evolving. Staying informed about any corporate actions the company plans to undertake is vital, as these decisions might have a direct or indirect impact on your investment. Furthermore, don’t underestimate the power of your voice as a shareholder. Participate actively in voting on resolutions that require shareholders’ approval. This can be done either by attending general meetings in person or by exercising your rights through a proxy. Being proactive in these areas helps you stay aligned with your investment objectives and plays a part in the broader governance of the company.

Monitoring Your Shares

Staying abreast of your investments is crucial, and the SGX website offers live trading prices to help you with that. Under SGX Listing Rules, companies must disclose significant information, including full-year and interim financial results, via SGXNET. Your broker might also furnish research and analysis on the shares that interest you. Consistently monitoring the company’s performance, understanding its industry, and keeping tabs on any public announcements or disclosures will enable you to make informed decisions and react to market changes promptly.

Investment – How Much Of My Earnings Should Go Into It?

Tracking Corporate Actions

Corporate actions, such as bonus or rights issues and share buybacks, can significantly impact your position as a shareholder. It’s vital to understand how these actions will affect you. The SGX website is a valuable resource, hosting company announcements and circulars regarding proposed corporate actions. By actively tracking these actions, you maintain an awareness of how your investments might shift, allowing you to respond in a way that aligns with your investment strategy.

Attending General Meetings and Voting

General meetings are more than a corporate formality; they’re an opportunity. As an ordinary shareholder, these meetings enable you to vote on significant matters and interact with the company’s board or senior management. Participation in these meetings fosters a deeper connection to your investments and provides insights that might not be apparent from financial statements or press releases.

Concerns about an SGX-Listed Company

Investing in shares carries inherent risks, but it also includes expectations of transparency and compliance. If you have concerns about a company’s adherence to SGX’s listing rules or suspect possible market misconduct, SGX is available for contact. Alternatively, the company’s Annual General Meeting is an appropriate venue to express your concerns. These channels ensure that your voice as a shareholder is heard and that companies are held accountable to their investors.

Investment Checklist

Investing in shares is both an opportunity and a responsibility. Before investing, make sure you:

  • Possess sufficient knowledge and experience to evaluate the merits and risks of the shares.
  • Have access to and understand analytical tools to assess the investment’s impact on your portfolio.
  • Maintain adequate financial resources and liquidity to bear the investment risks.
  • Are capable of monitoring changes in market, economic, or other conditions that may affect the issuer or share trading, either independently or with the assistance of a financial advisor. Ensuring these checkpoints can help create a well-rounded and resilient investment strategy that aligns with your financial goals and risk tolerance.

The act of investing, especially in complex structures like dual class share (DCS) companies, requires meticulous due diligence. Before making any investment decisions, it’s essential to thoroughly understand the firm and its performance by examining annual reports, corporate news, and other public disclosures. Keeping track of your investments and fully comprehending the planned corporate actions by the listed company, along with their potential impact on your interests, is not just prudent but fundamental to a successful investment strategy.

This understanding enables an investor to navigate the unique landscape and risks associated with such investments, aligning actions with both immediate goals and long-term vision.

Related Articles

subscribe now

Get email updates on the latest financial nuggets!

A Comprehensive Guide – Critical Illness VS Early CI Coverage: What It Is & How it Works

Get the latest insight on the Ultimate Guide on Critical Illness Coverage & How you should plan on it

Fill in the form and get the downloadable copy for free.