Beginner's Guide: How to Trade Stocks in Singapore
Stock trading can be both simple and intricate, attractive and dangerous. Before you take any action, understanding how it works and what you can do should be the first step. In this article, we will discuss the following questions, offering you a clearer view of stock trading:
Six steps to trade stocks online in Singapore
Benefits of stock investing in Singapore
Trading rules and path of stock trading in Singapore
Six steps to trade stocks online in Singapore
1. Find a broker
Finding a broker will be the first step for investors to trade stocks online. Investors can evaluate brokers based on several elements, including reliability, features, commissions and fees.
Reliability: Reliability should be the most important factor to consider when selecting brokers, as it safeguards individuals' investments. For one thing, a reliable broker will ensure financial security, efficient trade execution, and data accuracy with minimum or no delay. For another, a reliable broker will also provide timely and helpful customer support, ensuring investors receive the assistance they need.
Features: A user-friendly platform with useful features will facilitate individuals' stock trading. Advanced trading tools for technical analysis and fundamental analysis will largely save investors' effort and time. On moomoo, we provide 190+ pre-set functions, 63+ technical indicators, 38+ drawing tools and 6 multi-monitorings, offering free advanced features for all investors and traders.
Commissions and fees: In terms of stock, some brokers still charge a commission to trade, while most online brokers, including moomoo, charge no commission. However, most platforms will charge platform fees or data fees. On moomoo, free Nasdaq Real-time Quotes and free NVSE ArcaBook LV2 are offered for US stock trading, and free LV1 Real-time Quotes are provided for SG stock trading.
2. Open trading account
Investors are required to have a CDP account to store Singapore securities. A CDP account, operated by SGX, provides an integrated clearing, settlement and depository facilities for customers in the Singapore securities market, including both equities and fixed income instruments.
To open a CDP account, you must first meet the following criteria:
Must be 18 years old.
Cannot be an undischarged bankrupt.
Must have an existing Singapore bank account from one of these banks (you will be required to provide the bank details): Citibank, DBS/POSB, HSBC, Maybank, OCBC, SCB or UOB.
However, if you would like to trade overseas stocks, a CDP account doesn't work. A custodian brokerage account is required. Normally, the broker you open your account will act as the custodian for your overseas stock purchases. On moomoo, you can choose to sign up with Singpass and complete online forms by retrieving personal data from verified government sources. The specific steps are as follows:
After registration on moomoo, you can tap Accounts> Open Now to open an account.
Tap Next, and select your identity from Singapore Citizen, Singapore Permanent Resident, or Foreigners residing in Singapore.
Tap Continue with Singpass> QR code to log in with Singpass.
Tap the I Agree button, check your information, and complete a small survey related to your taxation and investing experience.
Tap Next, and read the Risk Disclosure statements.
Confirm your application. New account review is usually completed on the same application day but may take 1-3 business days in some cases. We will inform you immediately once your application is approved.
3. Fund your account
If you are using a custodian account, you need to fund your account before trading stocks. The amount is based on your preference and investment goals. Many brokers accept the transfer of funds from personal bank accounts. When funding your account, you will be required to select a deposit method. Then you can determine the amount of money and submit it.
Minimum Amount to Invest
There is no minimum account requirement for opening a stock account, nor for stock trading. To be more specific, the minimum amount to invest in stocks depends on which stock you want to invest in.
For example, if you want to start with penny stocks that trade at or below US$5 per share, such as Virgin Galactic Stock SPCE, what you need is one share price of it plus commissions and trading fee. In such a case, you may only need less than US$10 to start. However, if you want to embark on your investment journey with those large-cap stocks such as NVDA, whose price per share may be nearly US$500, you will need at least US$500 to start. At the end of the day, it's on your call.
4. Choose Strategy
Selecting a trading strategy is not as complicated as you may think, and investors sometimes will also adapt trading strategies to cater to different market situations or opportunities. Different investors may have their preferences towards different stock trading strategies.
Some focus on the financial data of a company, ready to conduct fundamental analysis; some prefer to spot opportunities from stock charts, willing to convey technical analysis. For technical analysis, some get used to following the trend and believe "trend is your friend", using a trend trading strategy to identify a trend and enter trades in the direction of the pre-determined trend; some will trade both sides on the movements of stock market, which is called swing trading strategy. In this case, investors will buy in when they expect the price to rise and sell out when the expect the price to fall.
All those strategies have their own benefits and drawbacks, and investors can decide which one to choose based on their investment goals and styles. On moomoo, we provide a bunch of advanced tools covering both technical and fundamental analysis, including the stock screener, visualized financial data, drawing tools for technical analysis, and rich technical indicators. All these tools are expected to facilitate stock trading.
5. Place an order
When placing your order, you have to decide your action (whether to sell or to buy), the quantity, the price, and your order type.
On stock trading platform, you will find there are two prices: ask and bid. The bid price represents the highest price a buyer will pay for the stock, and the ask price represents the lowest price a seller will accept for the stock.
Different from money market funds, stocks tend to be more liquid, making the price change quickly. Therefore, if you place a market order, you may find your order is settled with a completely different price. To solve this problem, online brokerage platforms have offered different limit orders, allowing investors to decide the buy or sell price price by themselves. However, the biggest disadvantage of limit order is that no settlement is guaranteed.
6. Monitor performance
Once the stock is picked and the trading strategy is defined, investors will need to monitor the performance of the stock and constantly review the efficiency of the trading strategy.
If you focus on technical analysis, you may consider monitoring changes of the chart, the formation of different chart patterns, or technical indicators such as moving average or trading volume.
If you focus on fundamental analysis, you may take a look at changes in its financial data, pay attention to earnings events or dividend payments.
If you are a news-based investor, you may emphasize blockbusters such as economic reports, political developments, or company announcements.
Benefits of stock investing in Singapore
Well-recognized for its stability and high dividends, the Singapore stock market is very different from the US stock market. Generally speaking, there are at least three reasons for you to invest in the Singapore stock market: flexibility, stability, and dividends.
As one of the most developed economies in Southeast Asia, Singapore boasts a stock market with huge potential. The Singapore Exchange (SGX) is Singapore's primary asset exchange, which lists stocks, bonds, options and other commodities. Being one of the largest stock market exchanges in Southeast Asia, SGX provides investors with a lot of opportunities to diversify their portfolios in a global approach. As of October 2023, there were 635 listed securities (excluding GDRs, Hedge Funds, and Debt Securities) on the Singapore Exchange with a market capitalization of 762,489 million SGD.
Apart from the large market cap, the high dividend endowed by Singapore stock market is another catalyzer for investors' attention. The Straits Times Index (STI) is a market capitalisation-weighted index that tracks the performance of the top 30 companies listed on SGX.
The Straits Times Index (STI) has a long history of performance, with the index first being introduced in 1966. The STI has delivered strong returns for investors over the past decade, with a total return of 61% compared to 41% for indices like the Dow Jones, Hang Seng, Nikkei 225, and FTSE 100.
STI stands out not only for its relatively good performance, but also for its high dividend. With a dividend yield of 4% annually, STI is considered to outperform other indexes such as the S&P500, whose annual dividend yield only accounts for 1.5%. The high dividend yields from the STI can be attributed to the strong dividend stocks in that the STI comprises, such as DBS, OCBC, and Keppel.
Here are the constituents of STI as of 15/11/2023.
>>SG Stock Market>>
Trading rules and path of stock trading in Singapore
Trading rules
Trading Hours & Opening/Closing Routine
For full-day trading in the Singapore stock market, the trading hours will be 09:00 am to 12:00 pm and 01:00 am to 05:00 pm.
In terms of the opening routine, pre-open will last from 08:30 am to 08: 58/59 am*, non-cancel will be from 08:58 am/08:59 am to 09:00 am*.
In terms of the closing routine, pre-close will last from 05:00 pm to 05:04/05:05 pm*, non-cancel will be from 05:04/05:05 pm to 05:06 pm*. Trade at close period will be from 05:06 pm to 05:16 pm, and the market will close at 05:16 pm.
*Trade at Close (TAC) is a ten-minute trading phase commencing immediately after the closing routine. Orders are matched continuously only at the fixed equilibrium price established from the preceding closing auction. TAC is available for a security on a trading day only if the closing auction for that security on that day resulted in a closing auction price; correspondingly, TAC will not be available for a security if there is no closing auction price on that day.
*The Pre-Open/Close phase ends randomly at any time within this one minute window and the Non-Cancel phase begins immediately after.
SG stock trading and settlement rules
SG stocks are T+0 transactions, and stocks bought on the same day can be sold on the same day.
SG stocks follow T+2 settlement arrangement where clearing and settlement will be completed on the second working day after the trade is transacted date.
Board lot sizes
The standard board lot size is 100 units. However, certain products such as some Exchange Traded Funds (ETFs), may trade in other board lot sizes.
Path
Moomoo can support you in investing in Singapore stocks.
PC Version:
Simple click to see what today's heat map tells, explore all you want.
App Version：
After you download the moomoo app, you can simply navigate to the Market Tab before clicking on the SG icon. This will bring you to the page, as seen in the screenshot below, where you will be able to see stocks tracked by STI, All-Share and Mid-Cap. You can also click the Heat Map and sort out stocks you are interested in based on sector.
Source
https://api2.sgx.com/sites/default/files/2023-11/SGX%20Monthly%20Statistics%20Report%20Update%20%28For%20the%20month%20of%20Oct%202023%29_FA.pdf
https://sg.finance.yahoo.com/news/5-singaporean-blue-chip-stocks-094004747.html
https://www.ig.com/sg/indices/singapore-index
https://www.sgx.com/securities/trading
