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Stock Trading

Basic Knowledge on Trading Singapore Stocks That Every Investor Should Know

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Basic Knowledge on Trading Singapore Stocks That Every Investor Should Know

Get Started With Trading Stocks?

If you know nothing about stock exchange, here is a quick start kit for you to acquire the basic knowledge that all beginners should comprehend before trading on any stock market.

Indexes

First of all, you need to know the various indexes. There are Dow Jones Industrial Average which is a price-weighted average of 30 significant stocks traded on the New York Exchange and the Nasdaq. America is doubtlessly considered one of the most influential countries that can cause great impact on the overall world economy; hence, the US markets’ performance is largely watched by all investors and traders worldwide.

Next, we have the 3 major European Markets which are France (CAC), Germany (DAX) and London (FTSE).

Finally, we have the Asian major markets which are Hong Kong (Hang Seng), Shanghai (SSE), India (SENSEX), Korea (KRX) and Japan (Nikkei).

Basic Terms That Investors Should Know

Bull Market refers to stock market is undergoing an upward movement and prices are going UP. Bear Market refers to stock market is undergoing a downward movement and prices are going DOWN. Long refers to the action of buying a stock. Short refers to the action of selling a stock naked or to sell out existing shares’ holdings. Beta stocks refer to stocks that trade in a wide range and movement can be erratic. Volatile refers to stock prices changes up and down in an random movement which can be difficult to read or predict. Liquidity refers to the degree to which an asset or security can be bought or sold in the market without affecting the asset’s price Bid prices refers to the best buying prices that investors are willing to pay for a particular stock Offer prices refer to the best selling prices that investors are willing to sell for a particular stock. Spreads refers to the smallest price change that a given stock can make.

[These are the general terms for you to kick start with. We will  add on more financial terms from time to time.]

In this article, we are focusing on Singapore stock market.

How To Get Started With Singapore Stock Market?

You have to know what are (1) Blue Chips, (2) Mid Caps, (3) Small Caps and (4) China-related stocks.

Blue chips are nationally recognized, well-established and financially sound companies. They are known to weather downturns and operate profitably even in face of adverse economic conditions. Their strong business structure and well diversification help to contribute to their long record of stable and reliable growth. Some classic examples include Singtel, UOB, DBS and OCBC. Most blue chips are also one of the constituents of the STI index. Mid Caps are companies with a market capitalization between and billion. Some examples are Yanlord, IndoAgriculture and Ascendas Reit. Small Caps are stocks with a relatively small market capitalization. Some examples are ECS and Ban Joo. China-related stocks refer to companies that operate most of their business in the Mainland, China.

 

Next, you need to know the constituents that made up the STI index. Constituents may vary with time when there are new stocks included or existing stocks excluded. This is to give the best accuracy of the overall Singapore Stock Market. Currently, we have 30 stocks that made up the STI Index.

STRAITS TIMES INDEX CONSTITUENTS (30 CONSTITUENTS)

CAPITALAND CAPITAMALL TRUST CITY DEVELOPMENTS COMFORTDELGRO CORPORATION COSCO CORPORATION (S) DBS GROUP HOLDINGS FRASER AND NEAVE GENTING INT’L PLC GOLDEN AGRI-RESOURCES HONGKONG LAND HOLDINGS JARDINE CYCLE & CARRIAGE JARDINE MATHESON HOLDINGS JARDINE STRATEGIC HOLDINGS KEPPEL CORPORATION NEPTUNE ORIENT LINES NOBLE GROUP OLAM INTERNATIONAL OVERSEA-CHINESE BANKING CORP SEMBCORP INDUSTRIES SEMBCORP MARINE SIA ENGINEERING CO SINGAPORE AIRLINES SINGAPORE EXCHANGE SINGAPORE PRESS HOLDINGS SINGAPORE TECHNOLOGIES ENGINEERING SINGAPORE TELECOMMUNICATIONS SMRT CORPORATION STARHUB UNITED OVERSEAS BANK WILMAR INTERNATIONAL

 

Different stocks are assigned with different percentage weight, meaning that these 30 stocks movement will directly affect the STI index performance. Certainly, the bigger the percentage weight, the greater the impact it has on the index. To know the percentage weights of individual stock and the price range of stocks, please refer to our blog. 

In addition, there are many useful links that investors should frequent them to check for updates. You may check for any changes on the % weighting from www.ftse.com on a monthly basis as changes do not happen often but once in a long time.

Next, www.sgx.com is a good website to obtain latest updates on company’s announcements.

Company’s Dividends Payout

There are 2 terms that investors have to know about dividends. One is cum-dividend which has a short form of “CD”. The other one is Ex-dividend which has a short form of “XD”.

Cum-dividend means if you purchase this stock during the period when it is showing “CD”, you are entitled to the dividend payout that the company had declared.

Ex-dividend means if you purchase this stock during the period when it is showing “XD”, you are not entitled to the dividend payout that the company had declared.

To facilitate better understanding, we have drafted 3 different kinds of situations to illustrate on dividend payout. Please note that the mentioned examples herein are all hypothetical.

Stock A has just announced good earnings and decided to declare 5cents dividends on Monday. Stock A will start to trade “CD” on Tuesday and going Ex-dividend on Friday.

Case 1: You did a fundamental analysis and found that Stock A is a good investment. So you proceed to buy on Tuesday. In this case, you are entitled to the dividend payout.

Case 2: You are an active stock trader and concluded that the chart pattern of Stock A has fulfilled your criteria of a good buy. You buy on Tuesday, however, the share does not perform to your expectation and you went on to sell your shares on Thursday. In this case, you are NOT entitled to the dividend payout.

Case 3: You are an active stock trader and concluded that the chart pattern of Stock A has fulfilled your criteria of a good buy. You buy on Tuesday and after holding for several days, the stock underperformed but it has yet to reach your stop loss price. Eventually you decided to sell your stocks on Friday. In this case, you are entitled to the dividend payout.

In short, if you buy a stock on “CD” and sell on “XD”, you are entitled to dividends. But if you buy on “CD” and sell on “CD” before “XD”; and/or buy on “XD”, you are not entitled at all.

Things To Note During ED

Pay attention on the amount given as dividends by the company. Large dividends payout might affect the share price once it goes ex-dividend. But you need not worry about the sudden plunge in share prices. Follow the 1-2-3 steps and use the information to decide on your next course of action.

You need to discount the dividend amount to get the exact trading price that the stocks should be trading for investors who are not entitled to the dividends. If the stock is trading above the discounted price, the stock is considered bullish. If the stock is trading below the discounted price, the stock is then considered bearish.

 

Example: Stock B is trading and giving out dividend of 7cents. On ex-dividend, Stock B should be trading at .93 for investors that are not entitled to the dividends. If Stock B managed to trade above .93, this indicates that Stock B is bullish. However, if Stock B falls below .93, it is considered bearish.

Stock’s behaviour

Every stock has its own unique movement. Some are volatile while some are pretty stagnant. You need to spend some time observing the share price movement and ensure that you are comfortable with their price range movement before you begin your investment.

For instance, UOB and DBS are considered high beta stocks with high daily fluctuations of up to (but not limited to) 20cents.

ComfortDelgro and SMRT are considered defensive stocks and are stagnate in price movements. Hence, you do not expect much movement over a short period of time on such stocks.

Some stocks that have wide movements can be hard to trade if you are an active trader. For example, Jardine group stocks which include Jardine C&C, Jardine Matheson and Jardine Strategic. These stocks have erratic movement which can pose substantiate threats to intra-day trading.

Erratic movement can be caused by a few factors such as liquidity issues. When you make a wrong judgment and share prices are moving against you, you would definitely want to exit the market with the least damage done. However, due to liquidity issue, you might be forced by circumstances to sell your positions at an undesired price which could result in heavy losses incurred.

In summary, active day traders should avoid trading erratic movement shares such as Jardine-related stocks or SIA. These shares are more suitable to

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Stock Trading

Winning the Stock Market Investing Game – Can Using Stock Market Metadata Help?

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Winning the Stock Market Investing Game – Can Using Stock Market Metadata Help?

There are two terms in the English language that bring a smile those of us who are looking to make money with our savings – “the best” and “investing”.  The problem is that not all of us can ever be sure these terms will consistently be used in one sentence to describe our performance when putting our money to work for us.

Today we’ll be looking at the term “the best” as it applies to the different ways of investing and gain a better understanding of what that means.  And in order to rate ourselves, it helps to put “the best” into context so that we can then determine how we measure up.

Best Place to Invest Money

Let’s start with the best place to invest money.  Well, this differs from person to person. There are a number of factors to be taken into consideration when making any type of investment.  Regardless of your choice of investment, the best way to invest is to do it intelligently.

The best way to invest money requires proper planning.  Questions have to be asked of oneself to determine if it will be either a short-term or long-term investment.  The resulting strategy to be used might actually be different.  But one thing is for sure – money must only be invested where its value will continue to grow.

Have a plan with specific goals in mind.  Then make a decision on the type of investment.  If investing in stocks is your decision, be prepared to do the appropriate amount of research before spending any of your money.  As a matter of fact, the same rule applies to any type of investing.

Hobbies are good examples of when investing can be fun and deal with a person’s passion for a specific focus of interest.  Whether it has to do with coins, stamps, trading cards, paintings, etc., they take great pride on the money they spend on what they accumulate.  And because they share a common passion with other individuals, for the most part, these investments bring value to them in interaction with others as the collection continues to grow.

But unless the collection contains some type of are commodity sought by other people, the chance of recovering one’s investment cannot always be guaranteed.  These types of investors are OK with that because they see value not in what the collection can be sold for but rather the feeling of pride and accomplishment the hobby affords the collector.

If your thinking is that the stock market is the best way to invest money, do it right or else your experience can end very abruptly with the loss of all the funds committed by you to this activity.

Investing in the Stock Market

Saying that you want to invest in stock market assets may be interpreted differently by many people.  It could be that you are either buying and selling shares in publicly-traded companies or mutual funds, trading stock options, trading currencies, and so on.

If you’ve decided on stocks, the natural assumption is that you have not only looked at stock prices for companies that are of interest to you but have completed a proper analysis.  This includes reviewing stock market history for these companies along with looking at stock charts to ensure their stock market results are heading in the direction you want.

Everybody knows the stock market attracts many investors.  For the most part, stock prices are reasonable and stock market results can be amazing.  A large percentage of the population consider stocks as the best place to invest money.

Investing in stocks is an activity that can help increase your net worth.  That is if you do it properly.  Shares in publicly-traded companies fall into one of about a dozen major stock sectors.  Regardless of the stock sectors, companies fall into one of three different classes each of which can be further classified into one of five separate categories.

Stock prices for shares in companies can be in a range from pennies to over a hundred thousand dollars each.  Smart investors do the proper research and analysis of companies that are of interest to them before spending any money.

But unfortunately, most investments made without the proper up-front work can also turn out to be very disastrous.  That’s one of the reasons why many people use stock market history, stock charts, stock market metadata analysis as well as a number of other sources of information to help plan their buying and selling decisions.

Why does the stock market attract so many investors?  The answer is probably because stock market results can be amazing. But unfortunately, most investments made without the proper up-front work can also turn out to be very disastrous. That’s one of the reasons why many people refer to stock market history, stock charts, and a number of other sources of information like stock metadata reports on the company before make their buying decisions.

The best stocks to buy are those that consistently appreciate in value.  It also helps if they pay dividends.  The problem is deciding on a specific stock to invest in.  One way to start is by examining companies that you are familiar with and whose products and services you use.  Look at publicly-traded companies with good reputations.

Popular Investing Techniques

There are some stock trading trends that have been gaining popularity, more specifically, buying stocks online and day-trading stocks.

Buying stocks online has become an ever growing phenomenon.  Investors and traders alike seem to enjoy the power of doing the deal without the help of a broker.  Because online access is a 24-hour event, people have the ability to immediately check on the latest stock prices and stock charts for companies of interest to them.

Day-trading stocks can be very exciting and quite profitable, that is if you know what you’re doing.  It’s a game where timing is everything.  Make the right decision and you’re a hero.  The wrong decision and you’re a loser.

Day trading is most often done by stock traders who do the deal when stock prices are right for them.  They can be going long or short on a specific number of shares because they know the target company’s stock market history and stock market results.

Regardless of the technique or approach you finally decide to use, there are always some basic steps that must be followed when investing in stocks.  Check out the stock market history and more specifically, the direction of prices for the stocks.  Then compare the performance of those company shares to stock market results for companies in similar stock sectors.  How do they compare to overall stock market results?

Remember to always analyze a company’s stock performance over an extended period of time. Carefully review the available stock metadata to determine facts like how much the price can typically vary during the day, when their stock prices are usually at their highest or lowest points during the day, and so.

But no matter if you use do your investing online or follow the time-proven standard of using a reliable stock broker with whom you have a good business relationship, you still have to complete the work necessary to ensure your investing success when buying or selling stocks.

Remember, always refer to the stock metadata reports on companies in which you want to invest.  This can help you spot directional trends that these stocks may be following.  If you are unfamiliar with stock market metadata, which is also simply referred to as stock metadata, more information can be found here.

Numerous examples of stock metadata reports can be found on the Bulls-with-Bears page of the Stock Market Keywords site.  It also helps to review their stock charts which you can easily find online.  Links to this type of information can also be found there.

Closing Comments

Although the stock market dropped quite a bit over the past year, indications show the economy is improving and with that, the market is going up.  Now only time will tell if stocks will be the best investment for people to make.

Stan Pokutylowicz is a senior Information Technology consultant who has been providing his services to major industry sectors (automobile manufacturing, airplane manufacturing, banking, engineering, food production, pharmaceuticals, rail transportation, telecommunications, etc.) across North America. He is recognized as a methodology expert (SDLC and PMM) and has both taught and coached Information Technology project team members the skills they need to deliver results, on time and within budget.

Stan has combined his technology skills with his passion for helping people understand the stock market. He is the System Architect and site-design specialist for Stock-Market-Keywords.

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The Evolution Of Indian Stock Market

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The Evolution Of Indian Stock Market

In the year 1920, a stock exchange was established in Madras called “The Madras Stock Exchange”. “The Madras Stock Exchange Association Pvt. Ltd.” was established in the year 1941. The Lahore Stock Exchange was formed in the year 1934. However, in the year 1936, after the Punjab Stock Exchange Ltd. came into existence, the Lahore Stock Exchange merged with it.

In Calcutta, a second Stock Exchange by name “The Bengal Share & Stock Exchange Ltd.” was established in the year 1937 and likewise in the year 1938, Bombay Stock Exchange also witnessed the formation of a rival Stock Exchange in the name of “Indian Stock Exchange Ltd.”

The U.P. Stock Exchange was formed in Kanpur and the Nagpur Stock Exchange Ltd. in 1940. The Hyderabad Stock Exchange Ltd. was incorporated in the year 1944. Two stock exchanges which came into being in Delhi by the name “The Delhi Stock & Share Brokers Association Ltd.” and “The Delhi Stocks & Shares Exchange Association Ltd.” were amalgamated into “The Delhi Stock Exchange Association Ltd.” in the year 1947.

The depression witnessed after the independence led to closure of a lot of exchanges in the country. Lahore Stock Exchange was closed down after the partition of India, and later on merged with the Delhi Stock Exchange. Bangalore Stock Exchange Limited was registered in 1957 and got recognition only by 1963. Most of the other Exchanges were in a miserable state till 1957 when they applied for recognition under Securities Contracts (Regulations) Act, 1956. The Exchanges that were recognized under the Act after it was enacted were Bombay, Calcutta, Madras, Ahmedabad, Delhi, Hyderabad, Bangalore and Indore.

Later during 1980’s, many more stock exchanges were established such as Cochin Stock Exchange (1980), Uttar Pradesh Stock Exchange Association Limited (at Kanpur, 1982), Pune Stock Exchange Limited (1982), Ludhiana Stock Exchange Association Limited (1983), Gauhati Stock Exchange Limited (1984), Kanara Stock Exchange Limited (at Mangalore, 1985), Magadh Stock Exchange Association (at Patna, 1986), Jaipur Stock Exchange Limited (1989), Bhubaneswar Stock Exchange Association Limited (1989), Saurashtra Kutch Stock Exchange Limited (at Rajkot, 1989), Vadodara Stock Exchange Limited (at Baroda, 1990), Coimbatore Stock Exchange and Meerut Stock Exchange.

A new phase in the Indian stock markets began in the 1970s, with the introduction of Foreign Exchange Regulation Act (FERA) that led to divestment of foreign equity by the multinational companies, which created a surge in retail investing. The early 1980s witnessed another surge in stock markets when companies such as Reliance, which created a new equity culture, accessed the capital markets.

Sensex, the 30-stock index of the Bombay Stock Exchange, was introduced in 1986 constituting stocks of large and established companies from different sectors. The base year for the index was 1978 -79.

During 1990s, India witnessed radical changes in its policies regarding Foreign Direct Investments and Foreign Institutional Investments as part of the liberalization policies. In 1990, the BSE crossed the 1000 mark for the first time. It crossed 2000, 3000 and 4000 marks in 1992.

The up-beat mood of the market was suddenly vanished with Harshad Mehta scam. It came to public knowledge that Mr. Mehta, also known as the “big bull” of Indian stock market, diverted large amount of funds from banks through fraudulent means. Millions of small-scale investors became victims to the fraud as the Sensex plunged shedding 570 points.

To prevent such frauds, the Government of India formed The Securities and Exchange Board of India or SEBI, through an Act in 1992. With the act, SEBI became the statutory body that controls and regulates the functioning of stock exchanges, brokers, sub-brokers, portfolio managers, investment advisors etc. The objective of SEBI is to protect the interests of the investors in securities and to promote the development of securities markets and to regulate the securities markets. The scope and functioning of SEBI has greatly expanded with the rapid growth of securities markets in India.

While going global, it became a necessity to lift the Indian stock market trading system on par with the international standards. On the basis of the recommendations of high powered Pherwani Committee, the National Stock Exchange was incorporated in 1992 by Industrial Development Bank of India, Industrial Credit and Investment Corporation of India, Industrial Finance Corporation of India, all Insurance Corporations, selected commercial banks and others.

NSE enables fully automated screen-based trading mechanism which strictly follows the principle of an order-driven market. Trading members are linked through a communication network which allows them to execute trade from their offices.  The prices at which the buyer and seller are willing to transact will appear on the screen and when the prices match the transaction will be completed. It ensures greater functional efficiency supported by totally computerized network.

Within one year of the onset of equity trading at NSE, it became India’s most liquid stock market. Further, NSE is said to have generated a dynamic process of change in the securities industry. It directly spawned new institutions like the Clearing Corporation and Depository and played a vital role in injecting new ideas into the securities markets such as derivatives trading.

In 1995, the BSE also replaced its open outcry trading system with totally automated trading known as the BSE Online trading, or BOLT, system. The BOLT network was expanded nationwide in 1997.

The last decade of 20th century has been exceptionally good for the stock markets in India. In the back of wide ranging reforms in regulation and market practice as well as growing participation of foreign institutional investment, stock markets in India have showed phenomenal growth in the 90’s. Investor base continued to grow from domestic and international markets.

Stock markets became intensely technology and process driven, giving little scope for manipulation. Electronic trading, digital certification, straight through processing, electronic contract notes, online broking have emerged as major trends in technology. Risk management became robust reducing the recurrence of payment defaults. Product expansion took place in a speedy manner. Indian equity markets now offer, in addition to trading in equities, opportunities in trading of derivatives in futures and options in index and stocks. Even modern financial instruments like ETFs are showing gradual growth.

Within five years of introduction of derivatives, Indian stock markets now are ranked first in stock futures and fourth in index futures. Indian stock markets are transaction intensive and thus rank among the top five markets in this regard. Stock exchange reforms brought in professional management separating conflicts of interest between brokers as owners of the exchanges and traders/dealers. The demutualisation and corporatisation of all stock exchanges is nearing completion and the boards of the stock exchanges now have majority of independent directors. Foreign institutions took stake in India’s two leading domestic stock exchanges. While NYSE Group led consortium that took stake in the National Stock Exchange, Deutsche Bourse and Singapore Stock Exchange bought equity in the Bombay Stock Exchange Ltd.

In today’s global scenario that witness the flow of capital and goods without borders, India is keen to go along with the trend with its reforms like improving the investment climate by allowing more and more foreign investors to invest in equity and debt markets, allowing Indian companies to issue ADRs and GDRs in international exchanges and enable them to raise resources through wide range of financing routes as well as permitting Indian companies and individuals to invest abroad.

Shareskool.com is an India focused investor education website. It aims to empower investors in India to make independent investment decisions through education and information.

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Stock Trading

Indian Stock Market Tips For Buying Of Shares

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Indian Stock Market Tips For Buying Of Shares

The economic recession did make stock market investors & brokers fearful, disturbing the stock trading immensely but the situation has improved a lot thereafter. A growing number of people are now investing in Indian stock market & making good profits. However the Indian stock market tips from expert stock analysts & Indian stock market news have guided them in taking investment decisions. It is well known that Indian stock market is driven more by stock market psychology than common knowledge. Many feel surprised at how Indian economy limited to domestic share market can remain least affected by the recession bug. Had it been global based, the Indian stock market scenario would have been completely different. Though Indian manufacturing companies witnessed a fall in their share market price due to economic downtrend but the stock crisis is not serious in nature. However, the revised RBI measures & modest debt equity ratios, the Indian stock market is recovering.
If you are investing in the Indian stock market for the first time, it is recommended that you should follow some Indian stock market tips that can make you trade in share market quite wisely. There is no doubt that ideal Indian stock market tips will increase your success rate & profitability also. There are several online share brokerage firms such as Nirmal Bang that provide investors stock trading tips including news on BSE sensex, market indexes, mutual funds & much more. These Indian stock market tips are provided by stock market experts after carefully analyzing & studying the market trend. The stock trading tips are devised on the basic of their past experience, technical analysis & the existing market trend. Some of the share trading sites offers these tips in every hour share trading through emails, phone calls & SMS. They track the data on broader indices including BSE sensex & NSE nifty to that investors could get a clear picture of Indian stock market. You can register yourself with such share brokerage firms to get the most up-to-date information on stock market share, market fluctuations etc. They will also provide you with expert analyst advice for a particular market condition.     
Easy access to Indian stock market tips & BSE sensex India have made share trading a lot easier for investors. Opening an online stock trading account via stock broker would enable you to get delivery of latest stock trading tips. Then you can start to either buy or sell stock shares & a stock certificated will be issued to you in evidence of the stock shares you own.

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Stock Trading

So You Want to Learn About the Stock Market

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So You Want to Learn About the Stock Market

Not so long ago, almost the only way the individual investor could trade in the stock market was by employing a stock broker to place trades for you.

With the advent of the Internet, and online stock market brokerage services this has changed. For the investor who is willing to learn how the stock market works, learn to manage stock market risk, learn stock market terminology and make good timely decisions trading stocks without the help of a broker is a good way to make a profit.

Because you are choosing and analyzing your own investments and not depending on a broker to help you, the costs or commissions are much lower. Of course when you eliminate the broker the services they used to perform are not available either, however most of the online brokers do provide a vast array of basic services.

All of them have links to quotes data bases and stock market listings, some may be delayed a few minutes and some may be live. Most have charts of the individual stocks available; some have stock market tutorials built into their sites. Most will maintain portfolios and watch lists for you; they will of course provide a method of placing orders and selling. Some will provide stock market analyst reports sector reports, earning estimates, and many other historical and technical analysis tools.

If your chosen online broker does not supply everything you need, there are a wide variety of free services available on the Internet. Most of the major portals (MSN, Yahoo, etc) have a Money or Investing section where you can obtain all of the information you are likely to need.

If you are diligent in learning how to read the stock market, how to analyze a stock, how to set entry and exit rules, and follow them, playing the stock market can be a profitable replacement for a part time job.

The importance of learning to ignore the “noise” cannot be over stated. Television, print and Internet ads will bombard you with information on trading tips, and trading systems, all professing to be the “holy grail” for making a fortune. You need to learn to filter all of this information and focus on the basics of trading stocks.

There are many types of trades available, including stocks, bonds, mutual funds, options, futures, commodities, penny stocks, etc. There are also different markets to trade in, such as Forex for trading currencies, commodities markets for such things as food and crop products, gold oil and so forth. All of these trades and markets offer different levels of risk, you need to be sure that you understand the risks and rewards of whatever trades or markets you decide to focus on.

Start with learning how to trade stocks, once you are making consistent profits, explore something else. Get good information, study things like The Wall Street Journal, Investors Business Daily, The Financial Times, check the financial offering on television, and study books on investing.

And most importantly enjoy the trip, and spend your profits wisely.

Jim Newell is a writer and Internet publisher for a variety of websites, newsletters and pulications.

For more information on Stock Market Investing please visit http://www.sys-adsystems.com/stockmarket

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