Singapore Exchange
Encyclopedia
Singapore Exchange Limited (SGX) is an investment holding company located in Singapore
and providing different services related to securities and derivatives trading and others. SGX is a member of the World Federation of Exchanges
and the Asian and Oceanian Stock Exchanges Federation
Singapore Exchange trades from 9am to 5pm, with a 12:30pm to 2.00pm break in between. From August 2011, Singapore Exchange introduced continuous all-day trading for the securities market.
(SES), Singapore International Monetary Exchange
(Simex) 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.
.
(CBOT) became operational. However, this joint venture was canceled 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
, called Chi-East. At the beginning of October 2010, this joint venture received approval from the Monetary Authority of Singapore
to operate a dark pool trading platform.
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.
.
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
and HP
. This platform is based on GENIUM, a trading platform developed by NASDAQ OMX.
(75%) and derivatives market
(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).
(ASX), which will create a bourse with a market value of US$14 billion had the deal been successful.
The Australian Competition and Consumer Commission
said on 15 December 2010 that it would not oppose SGXs takeover of ASX.
, 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.
, Wayne Swan
, 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.
Singapore
Singapore , officially the Republic of Singapore, is a Southeast Asian city-state off the southern tip of the Malay Peninsula, north of the equator. An island country made up of 63 islands, it is separated from Malaysia by the Straits of Johor to its north and from Indonesia's Riau Islands by the...
and providing different services related to securities and derivatives trading and others. SGX is a member of the World Federation of Exchanges
World Federation of Exchanges
The World Federation of Exchanges , formerly FIBV - Federation Internationale des Bourses de Valeurs , is an international organization for securities and derivative markets such as stock exchanges....
and the Asian and Oceanian Stock Exchanges Federation
Singapore Exchange trades from 9am to 5pm, with a 12:30pm to 2.00pm break in between. From August 2011, Singapore Exchange introduced continuous all-day trading for the securities market.
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.
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 SESDAQ. In order to be listed on the mainboard, a company has to fulfill some requirements set forth by SGX, while a listing a SESDAQ is not tied to the fullfillment of any additional conditions.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.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 SingaporeStock Exchange of Singapore
The Stock Exchange of Singapore was a stock exchange company in Singapore. It was formed in 1973, when the termination of currency interchangeability between Malaysia and Singapore, caused the Stock Exchange of Malaysia and Singapore to separate into the SES and Kuala Lumpur Stock Exchange Bhd...
(SES), Singapore International Monetary Exchange
Singapore International Monetary Exchange
The Singapore International Monetary Exchange was a futures exchange in Singapore.It was founded in 1984. On 1 December 1999, SIMEX merged with the Stock Exchange of Singapore to form the Singapore Exchange ....
(Simex) 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.
Second Listed Exchange in Asia-Pacific
On 23 November 2000, SGX became the second exchange in Asia-Pacific to be listed via a public offer and a private placement (Australian Securities Exchange was listed in 1998). Listed on its own bourse, the SGX stock is a component of benchmark indices such as the MSCI Singapore Free Index and the Straits Times IndexStraits Times Index
The FTSE Straits Times Index is a capitalization-weighted stock market index that is regarded as the benchmark index for the Singapore stock market. It tracks the performance of the top 30 companies listed on the Singapore Exchange...
.
Joint Venture
On 25 September 2006, the Joint Asian Derivatives Exchange (JADE), a joint venture between SGX and Chicago Board of TradeChicago Board of Trade
The Chicago Board of Trade , established in 1848, is the world's oldest futures and options exchange. More than 50 different options and futures contracts are traded by over 3,600 CBOT members through open outcry and eTrading. Volumes at the exchange in 2003 were a record breaking 454 million...
(CBOT) became operational. However, this joint venture was canceled 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 Global
Chi-X Global is a global, consortium-backed operator of alternative equity trading venues that compete with primary exchanges. Chi-X Global operates Chi-X Australia, Chi-X Canada, Chi-X Japan, Chi-East and the Chi-Tech technology unit.Originally launched by Nomura Holdings subsidiary Instinet,...
, called Chi-East. At the beginning of October 2010, this joint venture received approval from the Monetary Authority of Singapore
Monetary Authority of Singapore
The Monetary Authority of Singapore is Singapore's central bank and financial regulatory authority...
to operate a dark pool trading platform.
Acquisition
In March 2007, SGX bought a 5% stake in Bombay Stock ExchangeBombay Stock Exchange
The Bombay Stock Exchange is a stock exchange located on Dalal Street, Mumbai and is the oldest stock exchange in Asia. The equity market capitalization of the companies listed on the BSE was 1.63 trillion as of December 2010, making it the 4th largest stock exchange in Asia and the 8th largest...
for 42.7 million dollars.
On 15 June 2007, Tokyo Stock Exchange, Inc.
Tokyo Stock Exchange
The , called or TSE for short, is located in Tokyo, Japan and is the third largest stock exchange in the world by aggregate market capitalization of its listed companies...
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.
Tokyo Stock Exchange
The , called or TSE for short, is located in Tokyo, Japan and is the third largest stock exchange in the world by aggregate market capitalization of its listed companies...
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.
Representative Office
On 18 April 2008, SGX opened a representative office in BeijingBeijing
Beijing , also known as Peking , is the capital of the People's Republic of China and one of the most populous cities in the world, with a population of 19,612,368 as of 2010. The city is the country's political, cultural, and educational center, and home to the headquarters for most of China's...
.
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
NASDAQ OMX Group
NASDAQ OMX Group, Inc. is a United States public company that owns and operates the NASDAQ stock market and eight European stock exchanges in Armenia plus the Nordic and Baltic regions under the OMX banner...
, Voltaire
Voltaire
François-Marie Arouet , better known by the pen name Voltaire , was a French Enlightenment writer, historian and philosopher famous for his wit and for his advocacy of civil liberties, including freedom of religion, free trade and separation of church and state...
and HP
Hewlett-Packard
Hewlett-Packard Company or HP is an American multinational information technology corporation headquartered in Palo Alto, California, USA that provides products, technologies, softwares, solutions and services to consumers, small- and medium-sized businesses and large enterprises, including...
. 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.Financial Performance
As of 31 January 2010, SGX had 774 listed companies with a combined market capitalisation of S$650 billion. The revenues of SGX are mainly from the securities marketSecurities market
Securities market is an economic institute within which take place sale and purchase transactions of securities between subjects of economy on the base of demand and supply....
(75%) and derivatives market
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....
(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).
Merger Talks With ASX
SGX was in a merger talks with Australian Securities ExchangeAustralian Securities Exchange
The Australian Securities Exchange was created by the merger of the Australian Stock Exchange and the Sydney Futures Exchange in July 2006. It is the primary stock exchange group in Australia....
(ASX), which will create a bourse with a market value of US$14 billion had the deal been successful.
The Australian Competition and Consumer Commission
Australian Competition and Consumer Commission
The Australian Competition and Consumer Commission is an independent authority of the Australia government. It was established in 1995 with the amalgamation of the Australian Trade Practices Commission and the Prices Surveillance Authority to administer the Trade Practices Act 1974...
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 ExchangeTokyo Stock Exchange
The , called or TSE for short, is located in Tokyo, Japan and is the third largest stock exchange in the world by aggregate market capitalization of its listed companies...
, 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 Australian Treasurer and Deputy Leader of the Australian Labor PartyAustralian Labor Party
The Australian Labor Party is an Australian political party. It has been the governing party of the Commonwealth of Australia since the 2007 federal election. Julia Gillard is the party's federal parliamentary leader and Prime Minister of Australia...
, Wayne Swan
Wayne Swan
Wayne Maxwell Swan is the Deputy Prime Minister of Australia and an Australian politician. He has been an Australian Labor Party member of the Australian House of Representatives from 1993 to 1996, and then re elected in 1998 till today , representing the Division of Lilley, QLD...
, 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.
Companies listed on Singapore Exchange
As of 31 Jan 2010, there were 774 listed companies on the Singapore Exchange with a market capitalisation of SGD$650 billion.| Jan 2010 | |
|---|---|
| Domestic Listings | 461 |
| Foreign Listings (excluding China) |
160 |
| China Listings | 153 |
| Total listings | 774 |
Major shareholders
The major shareholders of Singapore Exchange Ltd as of November 3, 2010 are:| Percentage held | |
|---|---|
| SEL Holdings Pte Ltd | 23.45 |
| Citibank Nominees Singapore Pte Ltd | 15.81 |
| DBS Nominees Pte Ltd | 7.85 |
| DBSN Services Pte Ltd | 5.99 |
| HSBC (Singapore) Nominees Pte Ltd | 5.06 |
See also
- Straits Times IndexStraits Times IndexThe FTSE Straits Times Index is a capitalization-weighted stock market index that is regarded as the benchmark index for the Singapore stock market. It tracks the performance of the top 30 companies listed on the Singapore Exchange...
- Stock Exchange of SingaporeStock Exchange of SingaporeThe Stock Exchange of Singapore was a stock exchange company in Singapore. It was formed in 1973, when the termination of currency interchangeability between Malaysia and Singapore, caused the Stock Exchange of Malaysia and Singapore to separate into the SES and Kuala Lumpur Stock Exchange Bhd...
(SES) - Singapore International Monetary ExchangeSingapore International Monetary ExchangeThe Singapore International Monetary Exchange was a futures exchange in Singapore.It was founded in 1984. On 1 December 1999, SIMEX merged with the Stock Exchange of Singapore to form the Singapore Exchange ....
(SIMEX)