T’is the season of Thanksgiving.
As the year draws to a close, I would like to take some time to highlight three things that we can be thankful for in the Singapore stock market over the past few years.
1. Businesses around us
For one, the stock market allows us to participate in the businesses that we see around us. We may not know how to run a chain of supermarkets. Or operate a chain of curry puff stores. With the stock market, we are able to invest in companies like supermarket-chain owner Sheng Siong Group Ltd (SGX: OV8) or curry puff purveyor Old Chang Kee Ltd (SGX: 5ML).
In essence, we have the chance to put our money behind management teams that we think can do a better job at managing businesses than ourselves.
2. Dividends, dividends, dividends
In the Singapore stock market, investors have a buffet of choices when it comes to dividend stock.
Take the SPDR STI ETF (SGX: ES3), an exchange-traded fund (ETF) that mimics the fundamentals of the Straits Times Index (SGX: ^STI). The ETF offers a collection of 30 Singapore-listed companies and a 3.2% dividend (as of 24 November 2016). Elsewhere, Singapore Telecommunications Limited (SGX: Z74), the largest constituent within the STI, offers a 4.7% dividend at its opening price of $3.75 on Friday.
Dividends can supplement our income and help grow our wealth. Singapore investors can also benefit from not having taxes levied on dividends, which is not the case for all countries.
That’s something to be thankful for.
3. Lower lot size
In January 2015, the lot size for stock in Singapore was lowered from 1,000 to 100.
This may have happened more than a year ago, but it is a gift that keeps on giving. For example, it is a great development for investors who may not be able to afford the minimum one lot of shares for certain companies. DBS Group Ltd (SGX: D05), for instance, traded at $16.80 at the open on Friday. Before the lot size change, investors would have to cough out $16,800 for one lot of DBS Group shares. With the change, DBS Group shares are available of a palatable $1,680.
In effect, companies which a high stock price becomes more accessible. For the common investor, we have more flexibility to build a diversified portfolio.
That’s another thing to be thankful.
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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 contributor Chin Hui Leong doesn’t own shares in any companies mentioned.