Related Insights
In this article, we will take a deep dive into Asia’s biggest opportunities, Australia and Singapore. Both these markets are incredibly strong with high liquidity and a variety of assets including stocks, bonds, and cash equivalents.
The Singapore Exchange (SGX) should be particularly looked at, since it is not only a massive draw for investors, but is also the gateway into the larger Asian market, being one of the world’s most liquid international markets for the benchmark equity indices of China, India, Japan, and ASEAN. The SGX therefore attracts a large number of foreign investors — around 40%1 of the nearly 8001 listed companies in SGX have overseas origins, making it one of Asia’s most international stock exchanges, and one of the world’s most active trading centres.
A significant number of stocks on SGX are financial and industrial, which is why the market tends to rally as the global and Asian economy improves, making it cyclical in nature. This makes it predictable, but also minimizes risk. On the other hand, the dividend stocks (a major feature of the SGX), are rising steadily YOY and this year SGX Group a leading player’s dividend grew by 1.6 % (2023 over 2022)2. This makes the SGX a low-risk and high yield opportunity.
1 Why list on SGX dated October 2023 (https://www.sgx.com/securities/why-list-sgx)
2 SGX Group FY2023 Report dated August 17, 2023 (https://www.sgxgroup.com/media-centre/20230817-sgx-group-reports-fy2023-net-profit-s503-million)
3 Large-cap companies are those with a market capitalization value of more than $10 billion sourced from Investopedia.com dated March 23, 2022 (https://www.investopedia.com/terms/l/large-cap.asp).
4 Performance of stock market over the last five years according to Trading Economics dated October 2023.
While SGX features dividend stocks, the Australian Securities Exchange (ASX) runs one of the largest interest rate derivates market in Asia, focusing on minimizing losses. In addition, it operates in the bonds, equity, financial development, funds, and foreign exchange markets. The strength of the Australian dollar, in particular, gives investors an added advantage. There is an opportunity to expand your trading portfolio through exchange-traded funds (ETFs) and Managed Funds. The ASX also plays an important role in the commodities market.
The current form of the ASX came into existence due to the merger of Sydney Futures Exchange and the old Australian Stock Exchange, which later launched a new group structure and named it the ASX Group. Today, the ASX is among the top stock exchanges in the world. Suitably, it facilitates electronic trading.
Like any top stock exchange, ASX features a wide variety of assets and opportunities to diversify your portfolio. Some of the key sectors in the Australian market are materials, industrials, financials, energy, consumer discretionary sectors, information technology, and communication services.
5 Large-cap companies are those with a market capitalization value of more than $10 billion sourced from Investopedia.com dated March 23, 2022 (https://www.investopedia.com/terms/l/large-cap.asp)
6 Performance of stock market over the last five years according to Trading Economics dated October 2023
The Simple Summary
With low-risk investments and a focus on high yields respectively, the Australian and Singapore Exchanges offer the biggest opportunities for investors to invest in Asia. As always, we encourage research and staying in the know about market trends before making any investments. In fact, we also suggest catching up regularly with your relationship manager to discuss your portfolio, while also staying updated on overseas exchanges through CIO Insights.
If you are new to DBS, you can open your account now and connect with an investment advisor for a more detailed walk through of investment opportunities.
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