Summary
According to data from Trading Economics, Singapore is one of the largest economies in Asia, with the highest GDP per capita. This is quite impressive, considering the fact that big economies like Japan and China are also in Asia. Singapore is also an investment-friendly country, with over 52% of Singaporeans invested in the stock market. There is no capital gains tax in Singapore, meaning that apart from other smaller charges, investors keep full profits from stock trading in Singapore.
Any investor willing to trade stock in Singapore is open to billions of dollars worth of stocks in the Singapore Exchange. However, investors in Singapore are not limited to stocks listed on the Singapore Exchange alone. You can buy foreign stocks in Singapore from the New York Stock Exchange, NASDAQ, the London Stock Exchange, and other global stock exchanges all over the world. To do this, you need to get registered with a good stockbroker.
In this guide article, we will go through a step-by-step process on how to buy stocks from Singapore using an online stock broker. We will also look at all the characteristics of brokers to look out for when comparing so that you can have the best pick; like the account opening process, trading platforms available, fees, and commission. We will talk about the available markets to buy shares from as a trader, the best stocks to buy in Singapore, and the risks associated with stock trading. Finally, we will look at some opinions of traders who have traded in Singapore from social communities like Reddit or Quora.
How to Buy Stocks from Singapore in a Few Steps?
To buy shares from Singapore, you need to be registered with a stockbroker. Choose one of the stock brokers in the table above to trade stocks in Singapore. After selecting a broker, follow the steps below:
- Open a Share Dealing Account
- Deposit Funds
- Research and Pick Your Shares
- Select the Order Type
- Activate the Order and Buy your Shares
What Markets can you Buy Stocks from in Singapore?
If you live in Singapore, you have access to a good number of stock exchanges to buy and sell stocks. The biggest local stock exchange available to Singaporeans is the Singapore Exchange (SGX). However, Singaporeans can also trade on stock exchanges available in America, Asia, and Europe.
The Singapore Exchange is the largest local stock exchange in Singapore. There are over 480 companies listed on the SGX, including some companies from Australia, the Cayman Islands, and Bermuda. Well-known Singaporean companies like ABR Holdings, DBS Group, and Wilmar International Limited are all listed on this stock exchange.
The Singapore Exchange is the ninth-largest stock exchange in Asia, with a market capitalization of over $7 billion.
Other stock exchanges available to Singaporeans include the New York Stock Exchange, the Shanghai Stock Exchange, NASDAQ, the London Stock Exchange, and so many others. Singaporeans and other people living in Singapore can buy stocks from these exchanges using online stock brokers like IG Markets Asia and Interactive Brokers.
What are the Normal Fees for Buying Stocks from Singapore?
Trading stocks in Singapore is not free, you have to pay some fees to the broker you choose to trade with. These fees may come in the form of trading or non-trading fees, and they vary depending on the broker. Some fees you are likely to come across when buying shares in Singapore include:
Spread
Spreads are the most common fees traders pay to brokers. It is defined as the difference between the ask price and the bid price of an asset, and it serves as a small profit for brokers who create markets for traders to trade assets. Spreads are measured in pips, which is the lowest unit of measurement of change in value between stocks. Spreads differ from one broker to another, so ensure to check the spreads offered by the broker you are trading with before you register with them.
Commission
Some brokers charge you some commission to trade with them. Degiro, for example, charges a 1 € handling fee when trading US stocks. However, it charges a connectivity fee when you trade stocks in Singapore. There are commission-free stock brokers like Evest & ThinkMarkets that charge $0 for commissions.
Deposit and Withdrawal Fees
These fees are charged to your trading account when you deposit or withdraw money.
Inactivity Fees
These fees are charged to your account when you leave your account dormant for 6 months or more. Some brokers do not charge this fee, so check before you register.
Overnight Fees
Brokers often charge traders for holding a trade overnight.
Conversion Fees
Some brokers will take a small percentage of your money when you try to convert to USD or other acceptable currencies.
Pros and Cons of Buying Stocks from Singapore
Here are some of the pros and cons of buying stocks from Singapore:
Pros
- Access to some of Asia’s Biggest Company Stocks
- Portfolio Diversification
- Dividends from Stocks
- Voting Power in Asia’s Biggest Companies
Cons
- Risk Losing Money
- Risk Losing Profits to Trading Fees
How to Choose the Broker I Need to Buy Stocks from Singapore?
When choosing brokers to buy stock in Singapore, it is important you filter them by using some important characteristics. Some of the features to look out for when choosing a broker in Singapore are:
Regulation
Before you start trading with a stock broker, it is important you check that the broker is regulated. Different countries have different bodies regulating the activities of brokers within them, so check that the broker you wish to register with has been regulated by the major regulatory bodies in your country. In Singapore, the Monetary Authority of Singapore (MAS) regulates all financial institutions, including stock brokers, so check that your broker is registered with them. Brokers like IG Markets are registered and regulated by the MAS, so they are safer to trade with than other unregulated brokers.
If you wish to access stocks from Singaporean companies from another country, check that the broker you are using is regulated in your own country, whether by the SEC, FINRA, and NFA in the United States, the ASIC in Australia, etc.
Markets
Access to the best markets in the world gives you more options on available financial instruments and exposes you to more stocks for portfolio diversification. For this reason, it is important you pick a broker with access to as many markets as possible.
As mentioned above, Singaporeans and other non-citizens living in Singapore can access global markets like the NYSE, NASDAQ, London Stock Exchange, Shanghai stock exchange, etc. However, it is important to select a broker that has access to all these markets. Brokers like Evest and Think Markets offer access to many global stock exchanges.
Platforms
A trading platform is a piece of computer software that brokers use to offer access to the stock market. Some of the most common trading platforms investors are familiar with are MetaTrader (MT4 and MT5) and cTrader.
Nowadays, it has become increasingly popular for stock brokers to focus on proprietary platforms, i.e. their own created trading platform exclusively for traders registered with them. These platforms are easily more customizable and flexible than the common trading platforms, making them good choices for many for buying stocks in Singapore.
Trading platforms are highly essential to the success of your trading experience. A good trading platform offers charts, news, notifications, and other trading tools necessary for proper fundamental and technical trading analysis.
Offering
When you want to buy shares in Singapore, you can choose to buy real stocks or CFDs. CFDs (Contracts for Difference) are financial contracts between the broker and a trader that allows traders to place trades on the future value of an asset. A trader can trade a CFD by speculating which direction the asset value will go and earn profits if the asset moves in the speculated direction. This way, traders could potentially make profit even if the price value of an asset goes down, as long as they bet on it going down.
Some brokers offer both real stocks and CFDs, while other brokers are limited in their offerings, offering either only real stocks or only CFDs. For example, Evest and Think Markets offer only CFDs to traders in Singapore. Do your research to find out what your broker is offering before you choose to trade with them.
Trading Commission
Before you buy shares in Singapore, you need to be aware of the commissions attached to trading by different brokers. Many brokers, Degiro for example, will charge you a small percentage of trades when you use their platforms. However, if you don’t want to pay commissions, you can use a trading broker like Evest that charges zero commissions for trading on their platform.
What are the Popular Trading Platforms used to Buy Stocks from Singapore?
As mentioned earlier, a trading platform is a piece of software used to connect traders to the stock market. Trading platforms also offer access to tools like charts, news, etc. that help investors make good fundamental and technical analysis.
Broadly speaking, there are two major classes of trading platforms, proprietary trading platforms and open trading platforms. In recent times, more people have discovered the importance of easy customization with proprietary trading platforms, so many brokers have gravitated towards that direction. However, common trading platforms like MT4, MT5 and cTrader are still widely used today. Brokers can choose to offer either one or both proprietary & open trading platforms.
In this section, we will look at the proprietary trading platforms and one of the most popular third-party trading platforms, MT5 (MetaTrader 5).
Proprietary Trading Platforms and Apps
Proprietary trading platforms are trading platforms created by brokers exclusively for their registered traders. This means other brokers cannot offer these platforms to their customers. As mentioned, these platforms are more flexible and customizable than other trading platforms.
Proprietary trading platforms offer technical and fundamental analysis tools for smoother trading experience. They are available as applications in all kinds of devices, mobile and desktop. You can also access the web versions of the platform through any device with an internet connection.
MT5 Platform & App
The MetaTrader 5 platform is one of the most popular and most used trading platforms globally. It is an upgrade to the MT4 trading platform, which is also one of the most used trading platforms in the world.
MT5 provides great charts, tables, a clear activity dashboard, data visualization, and other important trading features. It is also the most used trading platform for stocks. Just like proprietary trading platforms, they are available as applications on mobile and desktop devices, with web versions for any device with an internet connection.
Why should I Buy Stocks?
If you live in Singapore where more than half the population are involved in one stock investment or another, you may be tempted to join the bandwagon and buy some shares in Singapore for yourself. But is it really right for you?
Here are some reasons why you should consider buying stocks:
Capital Growth Potential: Stock traders can potentially make profit by trading the right stocks. Traders usually do this by buying a stock they believe will rise in value, and selling it when it rises later. It is important to note that this doesn’t always happen, and traders could lose money if they make the wrong stock choice.
Dividends: Many companies pay dividends on their stocks, and this can act as a passive source of income for traders. Dividends are often paid quarterly, with a small percentage of companies paying monthly. These dividends could also be stock dividends, meaning the company gives more shares to the investor as opposed to cash.
Voting Power: Buying voting shares can give the investor some voting power to make decisions that concern the management of the company. Usually, common shares are voting shares, so by buying enough, you can influence company decisions.
Liquidity: Shares are often much easier to sell than other common assets like real estate and art. This means you can sell them quickly if the need arises, and hold on to them for as long as you want.
Is Buying Stocks Worth the Risk?
Buying stocks comes with some level of risk. In fact, up to 80% of traders lose money trading stocks. Less than 15% of investors actually make money from trading stocks. Still, becoming a profitable investor is possible if you have the right mindset, tools, information, skills, and processes required to become a successful stock trader. Here are some of the reasons why most traders fail:
- Entering with the goal of making money quick and easy
- Not learning about all the fundamental and technical tools and information required
- Indiscipline in trading
- Emotional trading
- Biting more than they can chew
If you can learn to do the opposite of these things, you can reduce your stock trading risks significantly and give yourself an opportunity to make stock trading worth it for you.
We went through two important social communities, Reddit and Quora, to learn what their users thought about how to buy stocks from Singapore.
Reddit, the front page of the internet, has over half a billion users talking about a wide range of topics, including, investing and the stock market. We took some time to go through threads by Redditors and find out what they thought about buying shares in Singapore.
We found a thread on the r/singapore subreddit where one Redditor asked others how they started investing. We found a response that we thought was the most comprehensive from a Redditor called u/p3dantic. This Redditor narrated how he/she started trading by reading countless books and blogs about investing, the Singaporean Stock Market, and comparisons of trading platforms. According to the user, this high information consumption only left them more confused. To new investors, they recommended:
- Learning the basics of stocks
- Setting aside a small amount of money for trading
- Opening a Central Depository (CDP) account and brokerage account
- Sticking to blue chip stocks in the beginning
- Receiving dividends on stocks, going to annual meetings, and familiarizing yourself with the stock life cycle.
- Trying out newer stocks after understanding the foundation of stocks. Read more on ETFs and index funds.
Another Redditor gave some advice on the same thread. He/she said that the best place to start was to buy RSPs or diversified ETFs like IWDA. The user also mentioned that new traders should not trade with the money they need or put their faith completely in analyst reports. Instead, they should read these reports and form their own opinions. Finally, this Redditor suggested Interactive Brokers as the best broker to use for low-cost stock trading in Singapore.
Quora
Quora is an online community, and just like Reddit, users on this platform talk about a wide range of topics, including investing and the stock market. We went through some threads on Quora to see what people thought about buying shares in Singapore.
The first thread we saw was from a Quora user asking how he/she could buy American stocks like Nintendo, Amazon, and Google from Singapore. Another user named Mike Al-Sidawi, who lives in Singapore, responded by telling the Original Poster to open an account with a broker to start trading with. He gave two examples of brokers the original poster could use for this purpose – Interactive Brokers and Standard Chartered Bank. He noted that the Interactive Brokers platform doesn’t allow traders to buy Singaporean stocks, even if you are a resident of Singapore.
On another thread, we found a Quora user asking how he/she could buy US stocks directly from Singapore. Another Quora user responded to this question by giving the original poster three options to consider. First, you could open a bank account in the US if you intend to always have a US presence or go there often. Secondly, you could set up an account with a Singaporean broker that allows US stock market trading for easy tax filing. Finally, you could open an account with a CFD provider like CMC Markets, IG Bank or Saxo Bank.
Bottom Line
Singapore is an investment-friendly country, and a large percentage of her citizens invest in the stock market. Singaporeans and people living in Singapore can trade stocks by opening an account with an online broker and choosing the stocks they want.
In this guide article, we talked about how to buy stocks from Singapore and went through the process of opening a trading account with stock brokers. We also looked at all the characteristics required when selecting brokers to trade stocks with. Some of these characteristics include the regulation of the broker, the platforms offered, the type of stocks offered, and the fees and commissions charged.
We established the two popular types of trading platforms, Proprietary and third-party trading platforms and explained the pros and cons of both. Finally, we explored some reasons why investors in Singapore should consider buying stocks and how to minimize risk.
Q & A
To start investing in stocks from Singapore, register with a broker like Evest that allows Singaporeans access to the local and international stock market.
The top stocks to buy in Singapore are Google, Amazon, Apple, DBS Group, OCBC Bank, Keppel Corporation, etc.
You can buy stocks in Singapore by going to the broker you are registered with and searching for the stock you want to buy. Type the amount you wish to purchase and click “buy”.
Yes, you can buy US stocks in Singapore using your online broker.
Yes, you can buy blue chip stocks like Amazon, Apple, Google, etc. from your online broker in Singapore.
To buy foreign stocks in Singapore, you need to be registered with a stock broker that offers access to foreign markets you are interested in. Open the broker’s platform and search for the stock you wish to buy using the ticker symbol.
Investing in stocks could be a bad idea for you if you want to use the money you need to trade stocks. Many people invest in stocks for the wrong reasons, like a quick profit or passive income without risks. If you buy stocks for this reason, it might be a very bad idea for you.
Buying stocks on margin means borrowing money from the broker to open positions you normally wouldn’t be able to open with the amount in your trading account.
There are a lot of things to check when buying stocks, like the price history of the stocks, the stock performance compared to other stocks in the same industry, whether the company pays dividends or not, and the size of the company.
The buying power of an investor refers to the amount of money available for the investor to buy stocks. It is the sum of the money in the trading account and all available margins.
A limit price is the price at which you set the buy or sell limit order to execute. This way you can automate stock trading at prices you set based on your analysis.
You can get into stock trading by registering with an online stock broker in Singapore and buying the stocks you want from their app or web platform.
Nobody can guarantee profits when you buy stocks. It is not impossible to make profits, however, the majority of stock traders do not make profits.
Companies that do not offer dividends on their stocks often reinvest their profits into the company. This means faster company growth which leads to higher stock prices and more value for the shareholder.
Some of the top stocks popular among mutual funds in Singapore are Sea Limited, Taiwan Semiconductor Manufacturing Company (TSMC), and Samsung Electronics.
What you do after buying stocks depends on your goals for the stock. You can decide to hold on to it for a long and receive dividends, hold on to it for long-term appreciation, or sell it if it appreciates after a short period.
Some of the best stock brokers in Singapore are Evest, ThinkMarkets, Webull, Saxo Bank, and Interactive Brokers.
