Singapore Exchange Limited also called as SGX is an investment holding company based in Singapore and offers various services associated with derivatives and securities trading and others. Singapore Exchange is affiliated to the Oceanian and Asian Stock Exchanges Federation and the World Federation of Exchanges.
SGX trades are done from 9 am to 5 pm. From 1 August 2011, Singapore Exchange brought in the non-stop all-day exchanging for the securities market. As an outcome, the lunch break,in the middle of 12:30 pm to 2.00 pm, was dismissed.
The Singapore Exchange manages several different sectors, each accountable for administering definite businesses.
Singapore Exchange IT Solutions Pte Ltd: offers maintenance and services regarding computers including software maintenance.
SGX ETS (Electronic Trading System): offers global exchanging entry to markets of SGX where 80 percent of the clients are not from Singapore, rather they are from foreign country.
Asian Gateway Investments Pte Ltd: subsidiary which is entirely possessed.
SGX DT (Derivatives Trading): derivatives exchanging are offered in this division.
Central Depository Pte Ltd: subsidiary accountable for depository services, securities clearing and settlement.
SGX ST (Securities Trading): securities exchanging are offered in this sector..
SGX Reach: an electronic trading platform.
SGX DC (Derivatives Clearing): subsidiary for settlement and clearing operations.
SGX AsiaClear: provides clearing services for forward freight agreements and OTC or over-the-counter oil swaps.
The firms recorded on Singapore Exchange is owned by one of two parties: the firms recorded on SGX SESDAQ and the firms logged on the SGX Mainboard. For the firm to be recorded on the mainboard, a firm has to pass some conditions lay out by SGX, while a recording a SESDAQ is not connected to pass any extra requirements.
In August 2004, the exchange started SGX Quotation and Execution System or SGX QUEST. The method is utilized by the exchange for securities and derivatives transaction.
The creation of SGX
SGX was established on 1 December 1999 as a holding company. The share capital of some previous exchange firms, namely Securities Clearing and Computer Services Pte Ltd (SCCS), Stock Exchange of Singapore (SES) and Singapore International Monetary Exchange (Simex) was aborted and new shares provided in these firms were fully paid up by the Singapore Exchange. In this method, all assets that is possessed before by these three firms were moved to SGX. The shareholders possessing the shares in the past in SCCS, SES and Simex received newly provided SGX shares.
Second Listed Exchange in Asia-Pacific
On 23 November 2000, SGX became the second exchange in Asia-Pacific to be recorded via a private placement and a public proposal (Australian Securities Exchange was recorded in 1998). Filed on its own bourse, the SGX stock is a basic of benchmark indices such as the Straits Times Index and the MSCI Singapore Free Index.
On September 25, 2006, a joint venture between Chicago Board of Trade (CBOT) and SGX which is named as Joint Asian Derivatives Exchange (JADE) became fully functional. Nevertheless, this joint venture was aborted in November 2007, with CME Groups merchandising of its 50% stake in the joint venture to Singapore exchange. The contracts exchanged previously on JADE were moved to SGX's QUEST trading platform.
In August 2009, a new joint venture emerged named Chi-East. This came from the merge of SGX and Chi-X Global. At the early days of October 2010, this joint venture acquired an acknowledgement from the Monetary Authority of Singapore to work on a dark pool trading platform.
In March 2007, Singapore Exchange purchased a 5% stake in Bombay Stock Exchange for 42.7 million dollars.
On June 15, 2007, a 4.99% stake in SGX was declared owned by the Tokyo Stock Exchange, Inc. Since then the worth of the shares has sagged down and the Tokyo Stock Exchange, Inc. has made a finalization to merchandise the shares it possess in SGX to its parent firm, the Tokyo Stock Exchange Group, Inc.
On January 31 2008, SGX gained a 20% stake in Philippine Dealing System Holdings Corp, which has become an connected firm of Singapore Exchange.
At the opening months of 2008, SGX come into terms to purchase at least 95% of Singapore Commodity Exchange. On June 30, 2008, SGX finished the acquisition of SICOM or also known as Singapore Commodity Exchange Ltd, which now is a 100% subsidiary.
On April 18, 2008, a representative office in Beijing was established by the Singapore Exchange.
On June 8, 2010, two years later after opening an office in Beijing, another office was established by SGX, this time it is in London. This is part of SGXs action to invest S$250 million into its Reach initiative. By utilizing this plan, SGX design an idea to make a data centre and the world's fastest trading engine as well as further joining trading communities in the world to Singapore. HP, NASDAQ OMX and Voltaire will carry the latest trading platform which is SGX Reach. NASDAQ OMX developed a trading platform called GENIUM, which is the basis of the SGX Reach platform.
NASDAQ OMX and Singapore Exchange have both agreed to have a partnership. Together they will offer a suite of solutions and instruments for firms, which is made to support the recorded firms in Asia.
Dual currency trading
A dual currency trading of securities is planned to unveil by Singapore Exchange — Which involves listed investments, stocks and bonds in two various denominations, the Singapore and US dollar on April 2, 2012.
As of January 31, 2010, Singapore Exchange had 774 recorded firms with a mixture of market capitalisation of S$650 billion. Derivatives market with 25% and securities market with 75% are the two main sources of SGX revenues.
SGX reported a net earnings of $165.8 million for the first half of its monetary year 2010. Excluding non-recurring items, net earnings was 7% greater in comparison to 1H FY2009 ($159.2 million). In the second quarter of the monetary year 2010, excluding the non-recurring items, net earnings of $77.0 million was 3% greater compare to its previous year. Operating revenue bolstered 6% to $324.0 million (1H FY2009: $304.9 million).
Merger discussions with ASX
Australian Securities Exchange also known as ASX is in a merger discussion with Singapore Exchange, which will make a bourse with a market worth of US$14 billion had the transaction been successfully utilized.
The Consumer Commission and Australian Competition stated on December 15, 2010 that it would not disagree on the said takeover of SGXs to ASX.
Criticism from Tokyo Stock Exchange
Singapore Exchange’s plans to purchase ASX have drawn criticism from the Tokyo Stock Exchange, which is the second biggest shareholder in Singapore Exchange. A representative of the Tokyo Stock Exchange stated that SGX's bid for ASX "would flag off a race to consolidate". Tokyo Stock Exchange head Atsushi Saito fears isolation of the Tokyo Stock Exchange as an outcome of the merge.
Revision of takeover proposal
Singapore Exchange amended its primary merger proposal in an attempt to overcome some of the opposition to the plans. This would have downgrade the amount of Singaporean citizens on the board of the mixed firm and would have given extra seats to Australians.
Rejection of merger
However, on April 8, 2011, Wayne Swan, the Deputy Leader of the Australian Labor Party and Australian Treasurer, made the finalization to stop the merger between the two exchanges. Upon the declaration that the federal government would stop the merger, Singapore Exchange take back its bid for Australian Securities Exchange shares and decided to look for other opportunities elsewhere.
Cooperation and merger talks with LSE
As of July 2012, Singapore Exchange is in merger discussions with the LSE also known as London Stock Exchange and the two exchanges already inked a cross trading agreement. However, on July 20 SGX said there are no plans for a merger of or takeover with LSE.
As of December 31, 2012, there were 776 recorded firms on the Singapore Exchange with a market capitalisation of SGD 934.543 billion.
This is the breakdown of the listed companies in SGX
Domestic Listings - 472
Foreign Listings (excluding China) - 159
China Listings - 145
Total of 776 recorded companies
The following is a listing of the shareholders of Singapore Exchange Ltd holding at least 5 percent as of July 31, 2012:
SEL Holdings Pte Ltd – 23.41%
Citibank Nominees Singapore Pte Ltd – 10.62%
DBS Nominees Pte Ltd – 7.50%
DBSN Services Pte Ltd – 5.65%