The Singapore Exchange or SGX is Asia’s international exchange offering platform which lists security products such as stocks, bonds, and options contracts along with foreign exchange and other financial commodities. In this article, we will take a closer look at some of these security products.
What are stocks? Stocks, or shares, are issued with the aid of using organizations to raise capital or financing from investors. When you purchase an organization’s stocks, you become a shareholder of the organization and can be entitled to a percentage of dividends that are declared or paid.
There are different categories of stocks, ordinary stocks, and preferred stocks. Ordinary shareholders tend to have more authority and certain rights over preference shareholders. For example, ordinary shareholders are allowed to attend general meetings in which they can vote for the election of a new director.
What are Real Estate Investment Trusts? If you don’t have money to invest in real estate, you can pull your money with other investors and simply give it to the REIT. The REIT is an organization that buys real estate with high rental income, such as malls, hotels, and offices.
All of these properties produce income and are hopefully profitable, and that’s what you have here. REITs are required to pass back 90% of the profits back to investors as dividends, and then the cycle continues. Units of REITs are traded and listed on the SGX at market-driven prices just like any other security product. Learn more about the Singapore Exchange.
3. Business Trusts
What are Business Trusts? A business trust is essentially an organization set up as a trust rather than a company. It is a combination of a company and trust, and the structure includes elements of both. A business trust operates like a company but is not a separate legal entity.
This means that the trustee of the trust is the legal owner of all the assets in the trust. Traditionally, companies are obligated to pay dividends from their accounting profits, but that is not the case for a business trust. This means that business trusts can pay distributions to investors from operating cash flows over accounting profits, and this gives an incentive to potential investors as they expect returns on more than just year-end profits.
4. Daily Leverage Certificates
What Is Daily Leverage Certificate? Daily Leverage Certificates are daily trading instruments that are designed for active and sophisticated investors who are looking to gain leveraged exposure to the underlying assets.
There are two types of daily leverage certificates available, daily long and daily short. Daily longs are for bullish investors who believe that the underlying asset is set to rise over the trading day for daily long leveraged certificates.
These track the net total return version of the underlying assets, taking dividends into account. Daily shorts are for bearish investors who believe that the underline asset is set to bold over the training day. Daily longs and daily shorts can help you capture the opportunities in a bull or bear market.
Also, Daily leverage certificates could potentially give an amplified return equal to a fixed leverage factor. Each daily long and daily short leveraged certificate comes with a fixed leverage factor which can be three times or five times.
What Is An ETF? It’s a financial term that describes a fund that is traded on an exchange just like a regular stock. This fund that is traded on an exchange consists of an assortment of stocks.
So people that choose to buy shares of this fund are putting their money in the fund to get price exposure to multiple stocks without having to buy them individually. ETFs tend to decrease transaction costs for investors and decrease volatility for investors. When buying stocks individually, each one has its price movement, and each stock you decide to invest in comes with transaction fees.
There you have it; these are some of the security products that are listed on the Singapore Exchange. It is Asia’s leading platform that offers a wide range of financial commodities for investors of all calibers.
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