Singapore Exchange Limited (SGX, SGX: S68) 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 continuously from 9am to 5pm. From 1 August 2011, Singapore Exchange introduced continuous all-day trading for the securities market. As a result, the lunch break, between 12:30pm to 2.00pm, was scrapped.
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.
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.
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 Singapore (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.
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 Index.
On 25 September 2006, the Joint Asian Derivatives Exchange (JADE), a joint venture between SGX and Chicago Board of Trade (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.
In March 2007, SGX bought a 5% stake in Bombay Stock Exchange 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 18 April 2008, SGX opened a representative office in Beijing.
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.
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.
Dual currency trading
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.
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).
Merger Talks With ASX
SGX was in a merger talks with Australian Securities Exchange (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.
Criticism from Tokyo Stock Exchange
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". 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 Party, 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.
Companies listed on Singapore Exchange
As of 31 Jan 2012, there were 772 listed companies on the Singapore Exchange with a market capitalisation of SGD$650 billion.
|Foreign Listings |
The major shareholders of Singapore Exchange Ltd as of November 3, 2010 are (table gives only shareholders with a stake of at least 5 percent):
|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|
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