Singapore
Singapore (), officially the Republic of Singapore, is a sovereign island country and city-state in maritime Southeast Asia. It lies about one degree of latitude () north of the equator, off the southern tip of the Malay Peninsula, bor ...
an investment holding company that provides different services related to securities and derivatives trading and others. SGX is also a member of the
World Federation of Exchanges
The World Federation of Exchanges (WFE), formerly the ''Federation Internationale des Bourses de Valeurs'' (FIBV), or International Federation of Stock Exchanges, is the trade association of publicly regulated stock, futures, and options exchang ...
and the
Asian and Oceanian Stock Exchanges Federation
The Asian and Oceanian Stock Exchanges Federation (AOSEF), which is composed of 19 stock exchanges, originated in 1982 as an informal organization called the East Asian Stock Exchanges Conference (EASEC). It was first conceived as an organization t ...
.
Structure
SGX operates several different divisions, each responsible for handling specific businesses.
* SGX ETS (Electronic Trading System): provides global trading access to SGX markets where 80 percent of the customers are from outside Singapore.
* SGX DT (Derivatives Trading): provides derivatives trading.
* SGX ST (Securities Trading): provides securities trading.
* SGX DC (Derivatives Clearing): subsidiary for clearing and settlement operations.
* SGX AsiaClear: offers clearing services for over-the-counter (OTC) oil swaps and forward freight agreements.
* SGX Reach: an electronic trading platform.
* Central Depository Pte Ltd: subsidiary responsible for securities clearing, settlement and depository services.
* Asian Gateway Investments Pte Ltd: wholly owned subsidiary
* Singapore Exchange IT Solutions Pte Ltd: provides computer services and maintenance as well as software maintenance
Listing
The companies listed on SGX belong to one of two groups: the companies listed on the SGX Mainboard and the companies listed on SGX NASDAQ. In order to be listed on the mainboard, a company has to fulfill some requirements set forth by SGX, while a listing on NASDAQ is not tied to the fulfillment of any additional conditions. SESDAQ was replaced on 26 November 2007 by the SGX Catalist after an extensive study of other market models and a public consultation in May 2007. The word "Catalist" is an amalgamation of the words "Catalyst" and "List", to reflect the idea that the Catalist board could be used as a catalyst to propel growth upon listing. Catalist differs from SESDAQ primarily in its use of a sponsor system to determine a prospective company's suitability to list and as a corporate advisor to advise on listing and corporate governance issues.
Trading system
The exchange launched SGX QUEST (SGX Quotation and Execution System) in August 2004. The system is used by the exchange for derivatives and securities trading.
Trading hours
Local times:
History
Formation of SGX
SGX was formed on 1 December 1999 as a holding company. The share capital of some former exchange companies, namely Stock Exchange of Singapore (SES),
Singapore International Monetary Exchange
The Singapore Exchange Limited (SGX) is a Singaporean investment holding company that provides different services related to securities and derivatives trading and others. SGX is also a member of the World Federation of Exchanges and the Asia ...
(SIMEX) that was founded in 1984 and Securities Clearing and Computer Services Pte Ltd (SCCS) was cancelled and new shares issued in these companies were fully paid up by SGX. In this way, all assets previously owned by these three companies were transferred to SGX. The shareholders previously holding shares in SES, SIMEX and SCCS received newly issued SGX shares.
Third Listed Exchange in Asia-Pacific
On 23 November 2000, SGX became the third exchange in Asia-Pacific to be listed via a public offer and a private placement after Australian Securities Exchange; which listed in 1998 and Hong Kong Stock Exchange earlier in 2000. Listed on its own bourse, the SGX stock is a component of benchmark indices such as the
MSCI
MSCI Inc. is an American finance company headquartered in New York City. MSCI is a global provider of equity, fixed income, real estate indexes, multi-asset portfolio analysis tools, ESG and climate products. It operates the MSCI World, MSCI ...
On 25 September 2006, the Joint Asian Derivatives Exchange (JADE), a joint venture between SGX and Chicago Board of Trade (CBOT) became operational. However, this joint venture was cancelled in November 2007, with CME Groups selling of its 50% stake in the joint venture to SGX. The contracts previously traded on JADE were transferred to SGX's QUEST trading platform.
In August 2009, SGX formed a joint venture with
Chi-X Global Chi-X may refer to:
* Chi-X Global, an operator of exchanges for trading equities
* BATS Chi-X Europe
BATS Chi-X Europe is a London-based, order-driven pan-European equity exchange that has been a subsidiary of BATS Global Markets since 2011. ...
, called Chi-East. At the beginning of October 2010, this joint venture received approval from the
Monetary Authority of Singapore
The Monetary Authority of Singapore (MAS) is the central bank and financial regulatory authority of Singapore. It administers the various statutes pertaining to money, banking, insurance, securities and the financial sector in general, as well ...
to operate a
dark pool
In finance, a dark pool (also black pool) is a private forum (alternative trading system or ATS) for trading securities, derivatives, and other financial instruments.
Acquisition
In March 2007, SGX bought a 5% stake in
Bombay Stock Exchange
BSE Limited, also known as the Bombay Stock Exchange (BSE), is an Indian stock exchange. It is located on Dalal Street in Mumbai. Established in 1875 by cotton merchant Premchand Roychand, a Jain businessman, it is the oldest stock exchange i ...
for 42.7 million dollars.
On 15 June 2007, Tokyo Stock Exchange, Inc. announced that it had acquired a 4.99% stake in SGX. Since then the value of the shares has declined and the Tokyo Stock Exchange, Inc. has made a decision to sell the shares it holds in SGX to its parent company, the Tokyo Stock Exchange Group, Inc.
On 31 January 2008, SGX acquired a 20% stake in Philippine Dealing System Holdings Corp, which has become an associated company of SGX.
At the beginning of 2008, SGX reached an agreement to buy at least 95% of Singapore Commodity Exchange. On 30 June 2008, SGX completed the acquisition of Singapore Commodity Exchange Ltd (SICOM), which now is a 100% subsidiary.
In November 2016 the Singapore Exchange (SGX) acquired the
Baltic Exchange
The Baltic Exchange (incorporated as The Baltic Exchange Limited) is a membership organisation for the maritime industry, and freight market information provider for the trading and settlement of physical and derivative contracts. It was locate ...
, headquartered in London.
Representative Office
On 18 April 2008, SGX opened a representative office in
Beijing
}
Beijing ( ; ; ), alternatively romanized as Peking ( ), is the capital of the People's Republic of China. It is the center of power and development of the country. Beijing is the world's most populous national capital city, with over 21 ...
.
On 8 June 2010, SGX announced it has opened an office in London. This is part of SGXs move to invest S$250 million into its Reach initiative. By implementing this initiative, SGX plans to create the world's fastest trading engine and a data centre as well as further connecting trading communities in the world to Singapore. The new trading platform, SGX Reach, will be delivered to SGX by NASDAQ OMX,
Voltaire
François-Marie Arouet (; 21 November 169430 May 1778) was a French Enlightenment writer, historian, and philosopher. Known by his ''nom de plume'' M. de Voltaire (; also ; ), he was famous for his wit, and his criticism of Christianity—es ...
and HP. This platform is based on GENIUM, a trading platform developed by NASDAQ OMX.
Partnership
SGX has entered a partnership with NASDAQ OMX. Together they will provide a suite of tools and solutions for companies, which is designed to support listed companies in Asia.
Dual currency trading
SGX plan to introduce dual currency trading of securities — Which includes stocks, bonds and other listed investments in two different denominations, the Singapore and US dollar on 2 April 2012.
Financial Performance
As of 31 January 2010, SGX had 774 listed companies with a combined market capitalization of S$650 billion. The revenues of SGX are mainly from the
securities market
Security market is a component of the wider financial market where securities can be bought and sold between subjects of the economy, on the basis of demand and supply. Security markets encompasses stock markets, bond markets and derivatives mar ...
(75%) and
derivatives market
The derivatives market is the financial market for derivatives, financial instruments like futures contracts or options, which are derived from other forms of assets
In financial accounting, an asset is any resource owned or controlled by a ...
(25%).
SGX reported a net profit of $165.8 million for the first half of its financial year 2010. Excluding non-recurring items, net profit was 7% higher compared to 1H FY2009 ($159.2 million). In the second quarter of the financial year 2010, excluding the non-recurring items, net profit of $77.0 million was 3% higher than a year ago. Operating revenue increased 6% to $324.0 million (1H FY2009: $304.9 million).
Small-cap sell-off
In October 2013, excessive speculation led to the sharp price fall of three mainboard stocks, Blumont Group Ltd, Asiasons Capital Ltd. and LionGold Corp. SGX and the Monetary Authority of Singapore (MAS) launched a review of activities around the three stocks, and in February 2014 jointly issued a consultation paper setting out a number of enhancements to strengthen the securities market and protect investors from speculative and market manipulative behavior. Enhancements included implementing a minimum trading price for mainboard listed issuers, requiring reporting of short positions and the creation of three independent regulatory bodies.
2018 Review of corporate governance code
Numerous guidelines are set to be shifted to SGX Listing Rules. At least one-third of the board members are to be independent directors. The shareholding threshold for assessing director independence has been lowered to 5% from 10%. A director will no longer be independent if he or any immediate family member is a substantial shareholder with a 5% stake or more. Relationships between chairman and CEO must be disclosed if they are immediate family members. There will be a proposed 9 year limit on independent directors as a hard limit, or the appointment of independent directors who have served more than nine years to be put to an annual vote requiring approval from majority of all shareholders and majority of non-controlling shareholders, with a transition period of three years to be provided regardless of the option adopted. Directors must be submitted for renomination and reappointment at least once every three years. If dividends are not paid, companies must state the reason.
The Corporate Governance Council of Singapore is proposing to force a "nine-year rule" that will reassess whether long-serving independent directors of listed companies will qualify as independent after being in that role for so long. The proposal was made in an effort to encourage companies to refresh and introduce more diversity into their boardrooms. The Singapore Exchange is seeking public feedback on whether it should be written into the Listing Rules, and public consultation will close on 15 March.
Proposed stock market trading link with Bursa Malaysia
On 6 February 2018, the Singapore Exchange (SGX) and Bursa Malaysia announced a proposed stock market trading link which will be operational by end-2018. The new link will allow investors to conduct trading of shares in an efficient manner. In addition to trading, the link will cover the clearing and settlement of traded stocks, procedures required for post-trading arrangements. Before the launch of the link, cross-border supervisory and enforcement arrangements will be worked upon by the
Monetary Authority of Singapore
The Monetary Authority of Singapore (MAS) is the central bank and financial regulatory authority of Singapore. It administers the various statutes pertaining to money, banking, insurance, securities and the financial sector in general, as well ...
and
Securities Commission Malaysia
The Securities Commission Malaysia ( ms, Suruhanjaya Sekuriti Malaysia) is a Malaysian statutory body with responsibility for development and regulation of capital markets in the country. It is located in Bukit Kiara near the National Science Ce ...
On 21 January 2020, Singapore Exchange (SGX) was listed in the Bloomberg Gender-Equality Index (GEI) for the first time in recognition of
gender equality
Gender equality, also known as sexual equality or equality of the sexes, is the state of equal ease of access to resources and opportunities regardless of gender, including economic participation and decision-making; and the state of valuing d ...
, as well as its commitment to diversity and board representation.
Merger talks
Merger talks with ASX
SGX was in merger talks with Australian Securities Exchange (ASX), which would have created a bourse with a market value of US$14 billion had the deal been successful.
The
Australian Competition & Consumer Commission
The Australian Competition and Consumer Commission (ACCC) is the chief competition regulator of the Government of Australia, located within the Department of the Treasury. It was established in 1995 with the amalgamation of the Australian Trad ...
said on 15 December 2010 that it would not oppose SGXs takeover of ASX.
Criticism from Tokyo Stock Exchange
SGX's plans to buy ASX have drawn criticism from the
Tokyo Stock Exchange
The , abbreviated as Tosho () or TSE/TYO, is a stock exchange located in Tokyo, Japan. It is the third largest stock exchange in the world by aggregate market capitalization of its listed companies, and the largest in Asia. It had 2,292 listed ...
, which is the second largest shareholder in SGX. A representative of the TSE said SGX's bid for ASX "would flag off a race to consolidate". TSE chief Atsushi Saito fears isolation of the Tokyo Stock Exchange as a result of the takeover.
Revision of takeover proposal
SGX revised its initial takeover proposal in an attempt to overcome some of the opposition to the plans. This would have decreased the number of Singaporean citizens on the board of the combined company and would have given addition seats to Australians.
Rejection of merger
However, on 8 April 2011, the
Treasurer of Australia
The Treasurer of Australia (or Federal Treasurer) is a high ranking official and senior minister of the Crown in the Government of Australia who is the head of the Ministry of the Treasury which is responsible for government expenditure and ...
,
Wayne Swan
Wayne Maxwell Swan (born 30 June 1954), often colloquially referred to as Swanny, is an Australian politician who is National President of the Labor Party. He was previously the Deputy Prime Minister of Australia and Deputy Leader of the Labor ...
, made the decision to block the merger between the two exchanges. Upon the announcement that the federal government would block the merger, SGX retracted its bid for ASX shares and decided to seek growth opportunities elsewhere.
Cooperation and merger talks with LSE
As of July 2012, SGX was in merger talks with the
London Stock Exchange
London Stock Exchange (LSE) is a stock exchange in the City of London, England, United Kingdom. , the total market value of all companies trading on LSE was £3.9 trillion. Its current premises are situated in Paternoster Square close to St P ...
(LSE) and the two exchanges already signed a cross trading agreement. However, on 20 July, SGX said there are no plans for a takeover of or merger with LSE.
Companies listed on Singapore Exchange
As of February 2022, there were 672 listed companies (excluding GDRs, Hedge Funds and Debt Securities) on the Singapore Exchange with a market capitalisation of SGD 899,124 million (roughly US$700 million).
Major shareholders
The following is a listing of the shareholders of Singapore Exchange Ltd holding at least 5 percent as of 3 August 2015:
* SEL Holdings Pte Ltd – 23.66%
Note: Nominees service companies were excluded
See also
*
List of stock exchanges in the Commonwealth of Nations
This is a list of active stock exchanges in the Commonwealth of Nations (Full Members). The Commonwealth of Nations features member-states located on all major continents and represents almost one-third of the Earth's population. Some states ha ...