So, you’ve decided to start trading SGX shares?

Dr. Clemen Chiang
Dr. Clemen Chiang

Once more, you’ve run through the list of things that Moneysense says you should know, if you are considering investing your money into the stock market:

  • You know enough, and you’ve experienced enough to know how to appreciate the risks and the benefits of investing in the Singapore Exchange (SGX).
  • You know about the right analytical tools, and are able to use them to evaluate the investments you’ll be making, as well as how each investment will affect your entire portfolio.
  • You know you’re liquid enough, or have enough resources, to be able to deal with the unpredictability of stock market investing — including the possibility of losing all or most of the money you’ve invested.
  • You’ll know how to keep tabs on market developments and other news, and know how they could affect the companies whose shares you’ve purchased, or trading in those shares.

You’ve decided you’ve got what it takes, and are ready to take the plunge. But how, exactly, do you go about it?

Three Easy Steps

The Securities Investors Association Singapore (SIAS) has outlined these basic steps for getting started in stock trading:

1. Open your securities accounts.

First, you’ll need a securities account with The Central Depository (Pte) Ltd (CDP). This account will be used for settling your trades. It will keep track of all the shares you’ll be purchasing at the SGX, and keep tabs on the shares moving in and out of your account as you carry on with buying and selling them.

It’s easy enough to open your CDP account (as long as you are 18 or older and not an undischarged bankrupt). All you have to do is fill in the CDP direct securities account application forms, either directly at the CDP or through your friendly neighbourhood stockbroker.

Dollarsandsense has the list of documents you’ll need to hand in along with those forms.

2. Find a stockbroker.

Then, you will also need a trading or brokerage account with a stockbroking member of Singapore Exchange Securities Trading Limited (SGX-ST). This account is the one that enables you to trade shares in the stock market. Both your CDP and your trading account have to be linked before you can start to trade.

Very simply, the stockbroker is your go-between who makes your trading possible on the SGX. Be sure to make sure that he is a licensed representative of an SGX-ST stockbroking company.

Even if you should choose to do all your trading yourself online, you’re still going to need a trading account with a stockbroking firm whose services include online trading.

Singvestor says he would rather open a trading account in an established retail bank. It allows you to keep your current and investment accounts in one place, which in turn allows you to have a convenient look at all your finances in one go.

Some options you can take a look at also include:

3. Go stock shopping!

Now you’re ready to tell your stockbroker which stocks you want to buy. Or, you can use your stockbroker’s online trading platform and buy them yourself. Same thing goes for when you’d like to sell your shares.

Other Ought-to-Knows

Here are some helpful hints for the fledgeling SGX trader as outlined by the SIAS:

  • You can only have one CDP securities account, but you can have several trading accounts with different stockbrokers.
  • If you should ever have problems with your stockbroker, you don’t have to take it lying down. File a complaint with his firm, or, if improper conduct or a breach of SGX rules are involved, get in touch with the Risk Management and Regulation Group of the SGX.
  • The market is closed on public holidays, but traditionally, Christmas Eve, New Year’s Eve and Lunar New Year’s Eve are all half-trading days (as in 9AM to 12:30 PM) if they fall on a weekday.

Fees, Fie, Fo, Fum…

Moneysense also has the list of fees you will need to pay once you start trading:

  • Brokerage commission to your broker
  • Other broker’s charges
  • CDP clearing fee
  • SGX trading access fee
  • GST payable on all fees

Ready, Steady, Start Trading!

Now that you’ve completed The Three Easy Steps, have all the facts straight and paid your dues, Dollarsandsense also recommends:

  • Checking out the different products that might be offered by the brokerage firm of your choice. On top of shares, some of the more popular products include Exchange Traded Funds (ETFs) and Real Estate Investment Trusts (REITs). If you were already interested in these products to begin with, make sure that the brokerage firm you choose offers them.
  • Loving Live Feeds — Live stock feeds can be helpful because you’ll be able to see how frequently certain stocks are traded. Some brokerage firms are happy to offer these feeds while others charge for them.
  • Saving the Dates of your payments or settlements. Most settlement dates for equities or shares are more or less the same, which is three days from the date of trade. This is the day when the trade is settled and the funds are exchanged. Make sure you have sufficient funds in your account on that day, because the brokerage firm might have to (and be very well able to) sell the securities involved.
  • Tracking Tick Sizes — which is crucial, owing to the fact that the tick size is the next asking or bid price that an investor can enter into the system to log a trade.

Be A Lifelong Learner

Having set off on your road to stock market investment success, you can’t afford to take too many pitstops. From here on out, just like it says at the beginning of this post, you will have to keep up to date on market developments.

This includes doing a lot of continuous research on the companies whose shares you have or will want to invest in. Because of its ongoing, real-time updates, the Spiking app is an ideal and convenient way to stay on top of trading activity on the SGX.

Spiking enables you to see which of Singapore’s 8,000 or more sophisticated investors are buying or selling the shares you might be interested in. Download the Spiking app now to follow and interact with fellow investors, as well as gain insight that could help guide you through the action-packed world of stock market investment.