Former Singaporean Finance Minister, Hon Sui Sen, had a vision back in 1973 — that the Stock Exchange of Singapore would become one of the leading stock exchanges in the world.
Today, more than 40 years later, the Singapore Exchange (SGX) ranks among the world’s top performing bourses, and is one of the biggest in Asia.
Referred to as the “Asian Gateway”, the SGX opens up a wealth of opportunities in Asian capital management and investment for local and overseas investors:
- Access to the world’s largest offshore market for Asian equity futures based on China, India and Japan, the three biggest economies in Asia, as well as ASEAN countries
- Access to overseas companies which make up more than 40% of SGX-listed companies
- Access to overseas bonds which make up 90% of SGX-listed bonds
- Access to a comprehensive value chain covering listing, trading, clearing, settlement, depository and data services
First and Foremost
The SGX also has the distinction of being the first in several market milestones:
- Asia’s first central clearing house for financial products and commodities
- Among the first in the world to abide by the Principles for Financial Market Infrastructure
- First and only regional central counterparty to have the full approval of US regulators as a Derivatives Clearing Organisation and Foreign Board of Trade
The SGX was also the first securities exchange in Asia to become “floorless” or completely electronic.
- Derivatives Exchange of the Year
- Futures and Options World and Global Capital of the Year
- Central Counterparty (CCP) of the Year
120.3 million contracts were traded on the SGX in 2014, making the Exchange the 26th largest derivatives exchange in the world in terms of volume.
But just as Rome wasn’t built in a day, the SGX did not reach the status it now enjoys among global markets, overnight.
Before the Singapore Exchange as we know it came to be, there was the Stock Exchange of Malaysia and Singapore. It was unusual then as it would be today, for there to have been a single bourse between two countries.
That singular arrangement came to an end after media announcements on May 15, 1973 heralded amendments to the control regulations on Malaysia’s foreign exchange. These amendments meant that currency between Singapore and Malaysia would no longer be interchangeable.
In the wake of this development, the chairman of the Stock Exchange of Malaysia and Singapore, Ng Soo Peng, led a committee to establish the Stock Exchange of Singapore, Ltd. (SES). So it was that a little more than a week later, on May 24th, the SES was incorporated, opening its doors for the first time on June 16th 1973.
SGX takes the stage
More than 20 years later, the Singapore Exchange was formed on December 1st 1999 as the result of a merger between the SES and the Singapore International Monetary Exchange (Simex). The SGX paid up the share capital of both entities along with those of the Securities Clearing and Computer Services (SCCS).
Having acquired the assets of all three entities, the SGX proceeded to list its own shares on its own bourse in December of the following year.
The rest, as they say, is history. The SGX went on (among several other achievements) to:
- Expand into commodities trading via the Joint Asian Derivatives Exchange (2005)
- Acquire the Singapore Commodity Exchange (2008)
- Receive its second Asia Exchange of the Year Award for its AsiaClear over-the-counter derivatives market (2009)
- Announce a joint agreement with the GreTai Securities Market of Taiwan (2009)
- Sign a Memorandum of Understanding (MOU) with the Securities Investors Association (2012)
- Become the first Asian firm to be registered as a Derivatives Clearing Organisation by the Commodity Futures Trading Commission (CFTC) (2014)
- Announce that the CFTC certified its index futures contracts based on the SGX MSCI Thailand Index, SGX PSE MSCI Philippines Index and SGX MSCI India Index (2014)
What’s next for the SGX
The action continues to heat up on the SGX as it continues to give local and overseas investors more reasons to invest in the Asian Gateway:
- 67 of the 76 SGX-listed companies that released their results last week reported profits.
- The SGX’ total revenue for the first three months of 2016 is up 3 per cent from same period last year.
- A major multinational real estate corporation listed four-year retail bonds on the SGX Mainboard.
- A major Chinese bank signed an MOU with the SGX to encourage Chinese companies to invest in Singapore’s capital markets.
- A major Malaysian manufacturer of rubber gloves is looking to issue $20 million worth of shares on the SGX by June this year.
- There are now 53 Trading Members of the SGX derivatives market, following the membership of a Hong Kong-based futures company.
- The SGX is currently working on becoming a multi-asset exchange.
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