It?s common to hear about Singaporean investors? fears about investing in shares listed in foreign countries. They might cite unfamiliarity with companies based overseas as well as being exposed to currency risks for shares that are listed in foreign exchanges as some of the reasons for a preference toward investing locally.
But, in an increasingly globalised world, it?s not at all uncommon to find locally-listed Singaporean companies with a significant presence overseas – in effect, turning a local investor into a bona fide global investor.
Food & beverage retail…
It’s common to hear about Singaporean investors’ fears about investing in shares listed in foreign countries. They might cite unfamiliarity with companies based overseas as well as being exposed to currency risks for shares that are listed in foreign exchanges as some of the reasons for a preference toward investing locally.
But, in an increasingly globalised world, it’s not at all uncommon to find locally-listed Singaporean companies with a significant presence overseas – in effect, turning a local investor into a bona fide global investor.
Food & beverage retail outlet operator Breadtalk (SGX: 5DA) generated 49% of its 2012 revenues from overseas, with China taking up the lion’s share. Telecommunications operator SingTel (SGX: Z74) is Singapore’s largest publicly-listed company by market capitalisation, but its wholly-owned Australian subsidiary, Optus, was responsible for 63% of its operating revenues for the financial year ended March 2013.
Transport company Comfort Delgro’s (SGX: C52) taxis are probably a well-known sight for commuters in Singapore – the company’s fleet of blue Comfort and yellow CityCab taxis in our island-nation numbered around 16,200 at the end of last year. But, that fleet of taxis is just 35% of Comfort Delgro’s total of 45,749 vehicles that are deployed in seven different countries, according to the company’s 2012 Annual Report. In fact, 41% of Comfort’s revenues for 2012 came from overseas.
DBS Group Holdings (SGX: D05) is Singapore’s largest bank by total assets. But at the end of 2012, only 65% of the bank’s total assets of S$353b were located in Singapore, highlighting the international nature of DBS’s business activities.
These are just a few examples of locally-listed companies with sizeable operations in Singapore as well as overseas. When investors invest in these companies, they are also investing in the opportunity to partake in global growth.
But bear in mind that at the same time, investors can’t know what goes on overseas with these locally-listed companies in much the same way as they might be unfamiliar with the operations of overseas-listed companies. Also, an investor with an aversion to investing overseas on the basis of fear of currency risks might still be running such risks that just appear in an indirect way through a company’s financial statements.
Ultimately, as investors, we are sometimes more global than we think even if we limit ourselves to investments in local shares, making some fears of investing-internationally seem somewhat irrational. As such, why not cast our geographical-net wider so that we increase our chances of finding even more great businesses to add to our portfolio.
After all, the world truly is our oyster – geographical boundaries be gone!
Click here now for your FREE subscription to Take Stock Singapore, The Motley Fool’s free investing newsletter. Written by David Kuo , Take Stock Singapore tells you exactly what’s happening in today’s markets, and shows how you can GROW your wealth in the years ahead.
The Motley Fool’s purpose is to help the world invest, better. Like us on Facebook to keep up-to-date with our latest news and articles.
The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore contributor Chong Ser Jing doesn’t own shares in any companies mentioned.