Always wondered how to buy stocks in Singapore?
Start here to get an overall picture of how the Singapore stock market works, from opening your first brokerage account to buying your first stock and more.
You need a brokerage account to buy stocks in the Singapore stock market.
The good news is that account opening is free and there is no maintenance fee whatsoever if you choose not to use the account.
However, some brokers may require you to place a deposit from S$1,000 to S$5,000, depending on your profile.
To open one, you can ask your friends to recommend a stock broker to you or just go to any brokerage firm with your identity documents and bank account details to apply for one. If you have a preferred stock broker you must indicate it on the application form. If not, one will be allocated to you randomly.
The processing of your application will take about 2 weeks. You will receive your account number and password separately via snail mail.
You will fill in 3 to 4 forms
1) Application for opening of trading account
- You buy or sell stocks using this account
2) Application for opening of securities account
- Your stocks are deposited here after you buy them. When you sell your stocks, it will be taken out of this account and delivered to the buying party.
3) Linkage of trading account to securities account
- Just a form to link the two accounts
4) GIRO (optional)
- By far the most convenient way to make payment, receive proceeds or receive dividends from your stocks.
To buy stocks, go to the brokerage firm’s website and login with your account number and password. After logging in, you will see a table similar to this
Read the table across. For a start, you only need to be concern with 5 items: Counter name, BVol, Buy, Sell, SVol.
Take for example, on the 6th row, Singtel has BVol 376, Buy $2.94, Sell $2.95 and SVol 252
That means you can buy Singtel at $2.94 if you are willing to queue up behind 376 units. Alternatively, you can buy immediately if you are willing to pay a higher price at $2.95. What difference does $0.01 make? It can be huge.
When you buy 10,000 shares at 2.94, your cost is
10,000 shares x $2.94= $29,400
When you buy 10,000 shares at 2.95, your cost is
10,000 shares x $2.95= $29,500
That’s a difference of $100. The more shares you buy, the greater the difference.
There are 2 tiers to the commission. You pay either a % or a minimum amount, depending on the contract value of your stock. Below is an example of the commission incurred when you buy stocks in Singapore
Base on a percentage (0.28%) of the contract value
Contract value: 10,000 shares x $2.95= $29,500
Commission: $29,500 x 0.28% = $82.60
Based on a minimum charge (S$25)
Contract value: 1,000 shares x $2.94 = $2,940
Commission: $2,940 x 0.28% = $8.23
Since the commission is lower than the minimum charge, you pay S$25 instead.
I have always encourage my clients to put in the time to do research on their own. You can look for bargain stocks by going through the financial statements of the companies posted on the SGX website. In this way, you will learn a lot more about investing than depending on others.
But if you can't spare the time or not confident enough to constantly search for these opportunities, using an advanced stock screener or following my common cents uncommon value stock picks may help.
You will receive a contract statement sent by the Central Depository (Pte) Ltd or CDP on behalf of your brokerage firm. CDP is the agency in charge of your securities account where your stock is deposited.
You have to make payment for your stocks on (T + 3) days after your purchase. For e.g. you buy a stock on Monday, you make payment on Thursday.
T= Transaction day
Only then will the stock be deposited into your securities account under your name.
Your stock will be taken out of your securities account and it will be delivered to the buying party’s securities account.
Your sale of stock proceeds will be deposited into your bank account on (T+4) days. For e.g. you sell a stock on Monday, you will receive your money on Friday
T= Transaction day