Singapore Exchange

SGX Centre 1
TypeStock exchange
LocationSGX Centre, Singapore
Coordinates1°16′45″N 103°50′59″E / 1.279042°N 103.849750°E / 1.279042; 103.849750
Founded1 December 1999 (1999-12-01)
Key peopleKoh Boon Hwee (Chairman)[1]
Loh Boon Chye (CEO)[2]
CurrencySingapore dollar & US dollar[3]
No. of listings776
Market capSGD$9.87 billion[4]
Websitewww.sgx.com
Singapore Exchange Limited
SGX: S68
Headquarters
Singapore Edit this on Wikidata
Websitewww.sgxgroup.com

Singapore Exchange Limited (SGX Group) is a Singapore-based exchange conglomerate, operating equity, fixed income, currency and commodity markets. It provides a range of listing, trading, clearing, settlement, depository and data services.[5] SGX Group is also a member of the World Federation of Exchanges[6] and the Asian and Oceanian Stock Exchanges Federation.[7] it is ASEAN's second largest market capitalization after Indonesia Stock Exchange at US$585.97 billion as of September 2023.[8]

History

SGX was formed on 1 December 1999 as a holding company. The share capital of some former exchange companies, namely Stock Exchange of Singapore (SES), Singapore International Monetary Exchange (SIMEX) that was founded in 1984 and Securities Clearing and Computer Services Pte Ltd (SCCS) were 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.[9]

On 23 November 2000, SGX became the third exchange in Asia-Pacific to be listed via a public offer and a private placement after Australian Securities Exchange; which listed in 1998 and Hong Kong Stock Exchange earlier in 2000.[10] 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 Index.

In May 2006, SGX launched Asia's first over-the-counter (OTC) clearing platform named SGX AsiaClear for a suite of OTC derivative products to reduce counter-party risks and increase liquidity. It introduced OTC trade registration and clearing for a wide range of forward freight agreements (FFA), and oil swaps. Shortly thereafter, it launched the world's first clearing and settlement of iron ore swaps and has since become the world's largest clearer of iron swaps.[11]

On 25 September 2006, the Joint Asian Derivatives Exchange (JADE), a joint venture between SGX and Chicago Board of Trade (CBOT) became operational.[12] However, this joint venture was cancelled 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.[7]

In March 2007, SGX bought a 5% stake in Bombay Stock Exchange for 42.7 million dollars.[13]

On 15 June 2007, Tokyo Stock Exchange, Inc. announced that it had acquired a 4.99% stake in SGX.[14] 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.[7]

On 31 January 2008, SGX acquired a 20% stake in Philippine Dealing System Holdings Corp, which has become an associated company of SGX.[7]

On 18 April 2008, SGX opened a representative office in Beijing.[7]

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.[15][16][17][18]

In August 2009, SGX formed a joint venture with Chi-X Global, called Chi-East.[19] At the beginning of October 2010, this joint venture received approval from the Monetary Authority of Singapore to operate a dark pool trading platform.[20]

On 8 June 2010, SGX announced it has opened an office in London.[21][22][23] This is part of SGXs move to invest S$250 million into its Reach initiative.[24] 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.[7] This platform is based on GENIUM, a trading platform developed by NASDAQ OMX.[25]

In November 2016 the Singapore Exchange (SGX) acquired the Baltic Exchange, headquartered in London.

In February 2011, SGX has entered a partnership with NASDAQ OMX to provide a suite of tools and solutions for companies, which is designed to support listed companies in Asia.[26]

SGX plan to introduce dual currency trading of securities — Which includes stocks, bonds and other listed investments in two different denominations, the Singapore and US dollar on 2 April 2012.[3]

In October 2013, excessive speculation led to the sharp price fall of three mainboard stocks, Blumont Group Ltd, Asiasons Capital Ltd. and LionGold Corp.[27] SGX and the Monetary Authority of Singapore (MAS) launched a review of activities around the three stocks, and in February 2014 jointly issued a consultation paper setting out a number of enhancements to strengthen the securities market and protect investors from speculative and market manipulative behaviour.[28] Enhancements included implementing a minimum trading price for mainboard listed issuers, requiring reporting of short positions and the creation of three independent regulatory bodies.

On 6 February 2018, the Singapore Exchange (SGX) and Bursa Malaysia announced a proposed stock market trading link which will be operational by end-2018. The new link will allow investors to conduct trading of shares in an efficient manner. In addition to trading, the link will cover the clearing and settlement of traded stocks, procedures required for post-trading arrangements. Before the launch of the link, cross-border supervisory and enforcement arrangements will be worked upon by the Monetary Authority of Singapore and Securities Commission Malaysia.[29] After the results of the 2018 Malaysian general election, plans for the stock market link were put on hold.[30]

On 21 January 2020, Singapore Exchange (SGX) was listed in the Bloomberg Gender-Equality Index (GEI) for the first time in recognition of gender equality, as well as its commitment to diversity and board representation.[31]

Merger talks

SGX was in merger talks with Australian Securities Exchange (ASX), which would have created a bourse with a market value of US$14 billion had the deal been successful.[32][33] The Australian Competition & Consumer Commission said on 15 December 2010 that it would not oppose SGXs takeover of ASX.[34]

SGX's plans to buy ASX have drawn criticism from the Tokyo Stock Exchange, 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".[35] TSE chief Atsushi Saito fears isolation of the Tokyo Stock Exchange as a result of the takeover.[36]

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.[37] However, on 8 April 2011, the Treasurer of Australia, 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.[38]

As of July 2012, SGX was in merger talks with the London Stock Exchange (LSE)[39] and the two exchanges already signed a cross trading agreement.[40] However, on 20 July, SGX said there are no plans for a takeover of or merger with LSE.[41]

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 per cent of the customers are from outside Singapore.[42]
  • SGX DT (Derivatives Trading): provides derivatives trading.[7]
  • SGX ST (Securities Trading): provides securities trading.[43]
  • SGX DC (Derivatives Clearing): subsidiary for clearing and settlement operations.[44]
  • SGX AsiaClear: offers clearing services for over-the-counter (OTC) oil swaps and forward freight agreements.[45]
  • SGX Reach: an electronic trading platform.[7]
  • Central Depository Pte Ltd: subsidiary responsible for securities clearing, settlement and depository services.[7]
  • Asian Gateway Investments Pte Ltd: wholly owned subsidiary
  • Singapore Exchange IT Solutions Pte Ltd: provides computer services and maintenance as well as software maintenance[46]

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 NASDAQ. In order to be listed on the mainboard, a company has to fulfill some requirements set forth by SGX, while a listing on NASDAQ is not tied to the fulfilment of any additional conditions.[7] SESDAQ was replaced on 26 November 2007 by the SGX Catalist after an extensive study of other market models and a public consultation in May 2007.[47] The word "Catalist" is an amalgamation of the words "Catalyst" and "List", to reflect the idea that the Catalist board could be used as a catalyst to propel growth upon listing.[47] Catalist differs from SESDAQ primarily in its use of a sponsor system to determine a prospective company's suitability to list and as a corporate advisor to advise on listing and corporate governance issues.

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.[48] 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 market (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).

Corporate governance code

Numerous guidelines are set to be shifted to SGX Listing Rules. At least one-third of the board members are to be independent directors. The shareholding threshold for assessing director independence has been lowered to 5% from 10%. A director will no longer be independent if he or any immediate family member is a substantial shareholder with a 5% stake or more. Relationships between chairman and CEO must be disclosed if they are immediate family members. There will be a proposed 9 year limit on independent directors as a hard limit, or the appointment of independent directors who have served more than nine years to be put to an annual vote requiring approval from majority of all shareholders and majority of non-controlling shareholders, with a transition period of three years to be provided regardless of the option adopted. Directors must be submitted for renomination and reappointment at least once every three years. If dividends are not paid, companies must state the reason.

The Corporate Governance Council of Singapore is proposing to force a "nine-year rule" that will reassess whether long-serving independent directors of listed companies will qualify as independent after being in that role for so long. The proposal was made in an effort to encourage companies to refresh and introduce more diversity into their boardrooms. The Singapore Exchange is seeking public feedback on whether it should be written into the Listing Rules, and public consultation will close on 15 March.[49]

Companies listed on Singapore Exchange

As of February 2022, there were 672 listed companies (excluding GDRs, Hedge Funds and Debt Securities) on the Singapore Exchange with a market capitalisation of SGD 899,124 million (roughly US$657 billion).[50]

November 2015
Domestic Listings 483
Foreign Listings

(excluding China)

 165
China Listings 123
GDRs, Hedge Funds, and Debt Securities 2
Total listings 776

Major shareholders

The following is top 10 largest shareholders of Singapore Exchange Ltd as of 30 June 2022:[51]

  1. SEL Holdings Pte Ltd – 23.41%
  2. Citibank Nominees Singapore Pte Ltd – 16.09%
  3. DBSN Services Pte Ltd – 10.88%
  4. Raffles Nominees (Pte) Limited – 9.65%
  5. HSBC (Singapore) Nominees Pte Ltd – 8.42%
  6. DBS Nominees (Private) Limited – 5.42%
  7. Phillip Securities Pte Ltd – 1.41%
  8. BPSS Nominees Singapore (Pte) Ltd – 1.03%
  9. United Overseas Bank Nominees (Private) Limited – 0.69%
  10. CGS-CIMB Securities (Singapore) Pte Ltd – 0.38%

See also

References

  1. ↑ "SGX Group's Board of Directors". Retrieved 20 April 2023.
  2. ↑ "SGX appoints Loh Boon Chye as new CEO". Channel NewsAsia. Retrieved 9 June 2015.
  3. 1 2 "SGX introduces dual currency trading". Channel NewsAsia. Retrieved 23 March 2012.
  4. ↑ "Singapore Exchange Limited".
  5. ↑ "About SGX Group - SGX Group". www.sgxgroup.com. Retrieved 20 April 2023.
  6. ↑ Singapore Exchange, WFE, archived from the original on 17 July 2011, retrieved 21 September 2010
  7. 1 2 3 4 5 6 7 8 9 10 SGX invests $250 million to offer fastest access to Asia, WFE, archived from the original on 17 July 2011, retrieved 21 October 2010
  8. ↑ "Singapore Market Capitalization".
  9. ↑ Shaw, A., Singapore Stock Exchange — Demutualization and Listing of the Singapore Exchange Limited (PDF), archived from the original (PDF) on 16 November 2004, retrieved 21 October 2010
  10. ↑ "Singapore Exchange shares expected to make shining debut". Today (retrieved from NLB). 23 November 2000. Retrieved 2 October 2019.
  11. ↑ "Commodities exchange of the year: SGX Commodities". Risk.net. 1 December 2022. Retrieved 21 April 2023.
  12. ↑ JADE Begins Trading With TSR 20 Rubber Futures Contract, CME Group, archived from the original on 14 July 2011, retrieved 1 October 2010
  13. ↑ Timmons, Heather (7 March 2007), "Bombay Stock Exchange sells 5% stake to Singapore Exchange", The New York Times, archived from the original on 3 September 2012, retrieved 1 October 2010
  14. ↑ Acquisition by TSE of SGX shares, Tokyo Stock Exchange Group, Inc., archived from the original on 15 July 2007, retrieved 11 October 2010
  15. ↑ Singapore Exchange Limited Completes Acquisition of Singapore Commodity Exchange Limited, Thomson Reuters, archived from the original on 1 February 2013, retrieved 1 October 2010
  16. ↑ Singapore Exchange Ltd acquires Singapore Commodity Exchange, Alacra, Inc., retrieved 9 February 2012 (subscription required)
  17. ↑ Singapore Exchange Ltd. Summary Annual Report 2008 (PDF), Singapore Exchange Ltd., p. 9
  18. ↑ "Financial Statements for the Full Year Ended 30 June 2009" (PDF), Supplemental Listing Document, Singapore Exchange, p. 18 of 35, archived from the original (PDF) on 27 January 2013, retrieved 27 January 2013
  19. ↑ Ex-BlocSec CEO to lead Chi-East dark pool, The Trade News, archived from the original on 2 July 2011, retrieved 10 October 2010
  20. ↑ Chi-East receives MAS approval to operate dark pool trading platform, Channel NewsAsia, archived from the original on 18 January 2013, retrieved 10 October 2010
  21. ↑ SGX expands in London (PDF), Singapore Exchange Limited, retrieved 21 October 2010
  22. ↑ SGX expands in London, The Trade News, archived from the original on 17 July 2011, retrieved 21 October 2010
  23. ↑ SGX establishes London office to better serve European customers, MediaCorp Pte Ltd, retrieved 21 October 2010
  24. ↑ SGX to boost trading speeds, global links, Singapore Press Holdings Ltd, retrieved 21 October 2010
  25. ↑ Gateway to Asia, The NASDAQ OMX Group, Inc., archived from the original on 4 January 2010, retrieved 21 October 2010
  26. ↑ "Singapore's SGX, NASDAQ to provide investor relation tool". Reuters. 22 February 2011. Retrieved 13 April 2023.
  27. ↑ Reuters "Singapore launches probe into penny stocks crash", 25 October 2013
  28. ↑ Baker and McKenzie "MAS and SGX Jointly Propose Enhancements to Securities Market and Self-Regulatory Framework" Archived 22 July 2015 at the Wayback Machine, February 2014
  29. ↑ "Singapore and Malaysia to set up stock market trading link by end-2018". The Straits Times. 6 February 2018. Retrieved 27 June 2019.
  30. ↑ "Proposed Singapore-Malaysia stock market trading link to be reviewed: Mahathir". Today. 6 June 2018. Retrieved 27 June 2019.
  31. ↑ Seow, Joanna (21 January 2020). "5 Singapore firms make it to global stock index recognising good gender equality data, policies". The Straits Times. Retrieved 23 July 2020.
  32. ↑ "SGX, Australian stock exchange in merger talks". Channel NewsAsia. Archived from the original on 25 October 2010. Retrieved 22 October 2010.
  33. ↑ Singapore stock exchange bids $8.3bn for Australian ASX Archived 19 May 2011 at the Wayback Machine
  34. ↑ "ACCC clears proposed acquisition of ASX by Singapore Exchange". Australian Competition & Consumer Commission. Archived from the original on 22 June 2011. Retrieved 7 January 2011.
  35. ↑ "Singapore's bid to buy stock exchange stings Australia's prestige". China Post. Archived from the original on 29 September 2012. Retrieved 19 March 2011.
  36. ↑ "Tokyo fears stock exchange merger plan". Archived from the original on 14 March 2012. Retrieved 19 March 2011.
  37. ↑ Shani Raja; Sarah Jones (15 February 2011). "Singapore Exchange Recasts ASX Bid to Fight Lawmaker Opposition". Bloomberg. Archived from the original on 6 June 2011. Retrieved 18 April 2011.
  38. ↑ "SGX eyes other opportunities". Channel NewsAsia. Retrieved 10 April 2011.
  39. ↑ Mangan, S.; Armstrong, R. (19 July 2012). "LSE, Singapore exchange in merger talks: report". Reuters. Archived from the original on 25 July 2012. Retrieved 30 August 2012.
  40. ↑ "SGX and LSE Sign Cross Trading Agreement". FinanzNachrichten.de. 11 July 2012. Archived from the original on 2 January 2015. Retrieved 30 August 2012.
  41. ↑ "Singapore exchange denies LSE merger talks". Reuters. 20 July 2012. Archived from the original on 23 July 2012. Retrieved 4 September 2012.
  42. ↑ Tan, Chwee Huat (2002). Singapore Financial and Business Sourcebook. Singapore University Press. p. 140. ISBN 978-9971-69-256-8.
  43. ↑ Exchange: Singapore Exchange Securities Trading Limited (SGX-ST) (PDF), emoney.co.ir, retrieved 24 November 2010
  44. ↑ Tan, Chwee Huat. (2005). Financial markets and institutions in Singapore (11th ed.). Singapore: Singapore University Press / NUS Publishing. p. 248. ISBN 978-9971-69-314-5.
  45. ↑ About SGX AsiaClear, Singapore Exchange Ltd, archived from the original on 29 May 2009, retrieved 12 October 2010
  46. ↑ "Investments in Subsidiaries" (PDF), The Asian Gateway Singapore Exchange Annual Report 2012 July 2011 – June 2012, Annual Report, Singapore Exchange Ltd, 2012, p. 122
  47. 1 2 "SGX Unveils Catalyst, Sponsor-Supervised Listing Platform For Fast-Growing Companies – Corporate/Commercial Law – Singapore". www.mondaq.com. Retrieved 7 June 2018.
  48. ↑ Singapore Exchange adopts Financial Information eXchange Protocol to strengthen position in global financial markets (PDF), ASIA PAC, archived from the original (PDF) on 11 October 2008, retrieved 12 October 2010
  49. ↑ "New corporate governance rules proposed". The Straits Times. 17 January 2018. Retrieved 18 October 2019.
  50. ↑ "SGX Monthly Market Statistics February 2022" (PDF). Retrieved 1 April 2022.
  51. ↑ "Singapore Exchange Annual Report (July 2021 - June 2022), p.261. Published on 12 September 2022". links.sgx.com. Retrieved 20 April 2023.

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