Singapore’s Most Expensive Share

DollarSignBuying and selling thousands of shares invariably sounds more impressive than dealing in say, just fifty. That’s probably why some investors with, say, a few thousand dollars to invest, tend to thumb through a list of shares to look for only those that cost around a dollar and ignore more highly-priced ones.

After all, owning a hundred thousand shares in Oceanus Group (SGX: 579) looks better than having just a hundred Jardine Cycle & Carriage (SGX: C07) shares in your portfolio.

Apart from Jardine C&C, there are other highly-priced shares in the Singapore market, too. One Jardine Strategic Holding (SGX: J37) share costs around US$34, and one United Overseas Bank (SGX: U11) share is roughly S$21. But the most highly-priced share on the Singapore market is currently Jardine Matheson (SGX: J36) – each share costs nearly US$57 apiece. That, however, pales in comparison to one Berkshire Hathaway share that costs US$175,859. You don’t get many of those for a kilo.

In general, though, quoted companies in Singapore are priced below a couple of dollars. For instance, the median share price for big cap, mid-cap and small cap shares is about S$0.85. Additionally, more than three quarters of shares on the three boards are priced below S$2.

Interestingly, many new investors mistakenly believe that highly-priced shares are both expensive and unaffordable. But it is more important to consider valuation, which although linked to the share price, is the traditional way to judge whether a share is expensive – not its price.

For instance, at S$10.30, shares in Oversea-Chinese Banking Corporation are valued at 11 times historic earnings. Meanwhile, shares in electronics wholesaler, GSH Corporation, which costs S$0.076, is 130 times cheaper in price terms. But here’s the thing, it is 45 times more expensive on valuation grounds.

Apart from price, Singapore investors also have to mindful of the board lot. This is something that investors in many other parts of the world don’t have to worry about – they can buy just one share in a company, if they wish. But here in Singapore, we generally have to buy in lots or 1,000 shares at a time, which can make investing in some shares quite unattainable.

However, things have improved thanks to the introduction of the Unit Share Market. It’s still not ideal but it is better than it used to be. After all it can be more expensive and definitely clunkier to trade in odd lots. That said, I would sooner buy an odd lot of a share that I want to own than a lot of an odd share I don’t much care for.

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore Director David Kuo doesn’t own shares in any companies mentioned.