In the preceding chapters of the “Discover SGX” series, we have navigated through SGX’s strategic geographical positioning, robust regulatory framework, and growing influence in Asia.
This chapter shifts the lens to the myriad investment opportunities that SGX offers, shedding light on the diversity of its product portfolio, which ranges from stocks and REITs to derivatives and SPACs and much more.
1. Gateway to global companies
The SGX stock market provides a gateway to a global spectrum of companies.
With firms from around the world listed on SGX, investors have the unique opportunity to invest in both domestic and international companies, spanning across various sectors and industries, thereby allowing a diversified exposure to different economic landscapes.
For example, investors have the opportunity to invest in Chinese electric vehicle (EV) maker, NIO Inc (NYSE: NIO) (SEHK: 9866) (SGX: NIO) on the SGX directly.
Other opportunities include investment in emerging market such as Vietnam via Exchange-Traded Funds (ETFs) such as the CGS Fullgoal Vietnam 30 Sector Cap ETF (SGX: VNM) (SGX: VND).
2. Dividend safety with Singapore REITs
Singapore REITs (Real Estate Investment Trusts) stand as one of the most attractive product offerings on SGX.
They allow investors to delve into real estate investments with lesser capital, providing exposure to a diverse range of real estate sectors, including commercial, industrial, retail, and residential properties.
This diversity ensures that investors can find a REIT that aligns with their investment strategy and risk tolerance.
3. Multi-Asset ETFs: A Spectrum of Choices
ETFs on SGX offer a kaleidoscope of investment opportunities.
Ranging from REITs ETFs and Gold ETFs to ETFs focused on Singapore equities, foreign equities, Asia and China bonds, Singapore bonds, and money market instruments, investors are spoilt for choice.
These ETFs provide a convenient and cost-effective way for investors to gain exposure to a variety of asset classes and geographical regions, enhancing portfolio diversification.
4. Derivatives: Hedging and Speculation Tools
SGX’s derivatives market is a bustling ecosystem offering a plethora of products, such as futures and options.
These derivatives serve as essential tools for hedging against market volatility and speculating on price movements, catering to institutional and retail investors.
SGX’s position as a major derivatives hub in Asia is reflected in its wide array of derivative products covering equities, fixed income, currencies, and commodities.
5. SPAC
The introduction of Special Purpose Acquisition Companies (SPACs) to SGX marks a new chapter in investment opportunities.
SPACs offer an alternative route for companies to go public and provide investors with a novel way to invest in a diverse range of industries and sectors.
Completion of SPCA listings is faster than traditional Initial Public Offering (IPO) listings as listing review process is focused on the sponsor.
Sponsor quality is paramount with assessment factors including positive track record of founding shareholders, technical and commercial expertise of the management team.
The entry of SPACs into SGX’s product portfolio reflects the exchange’s commitment to innovation and diversity in investment options.
6. Thai-Singapore DR Linkage: Bridging Markets
The Thai-Singapore Depositary Receipt (DR) linkage is a testament to SGX’s ongoing efforts to enhance cross-border investment opportunities.
This initiative will benefit the local ecosystem by broadening investment opportunities for retail investors, intermediaries and issuers.
Leveraging existing market infrastructure will help to provide a liquidity connection between two of the largest ASEAN markets.
The DR model is aligned across both markets to adopt promotion. DRs are issued domestically and traded according to home market conventions and rules.
SGX offers a wide spectrum of products for investors to diverse their portfolio
SGX emerges as a treasure trove of diverse portfolio opportunities, offering a wide spectrum of products to cater to the varying needs and strategies of investors.
Whether it’s delving into the global equities market, exploring the real estate sector through REITs, diversifying with multi-asset ETFs, speculating with derivatives, or venturing into new avenues like SPACs and cross-border DR linkages, SGX provides a rich and varied investment canvas.
As we further unravel the multifaceted nature of SGX in this series, the diversity of its product offerings continues to underscore its appeal to global investors seeking to tap into the vibrant and dynamic markets of Asia.
Disclaimer: ProsperUs Head of Content & Investment Lead Billy Toh doesn’t own shares of any companies mentioned.
