5 things to note when trading overseas
18 Sep 2018

5 things to look out for before you invest overseas

If you’re already investing in Singapore and looking to up your investment ante by exploring bigger markets like Hong Kong or USA, there’s some things you need to take note of before you begin.

Size of the markets

Hong Kong and USA are among the top five countries with the largest stock markets in the world. The number of companies listed in the Hong Kong stock market has risen steadily to over 2,000 companies, while USA remains home to big guns such as Facebook and Amazon with 4,336 listed companies.

This gives Singaporean investors more choices to venture outside of the Singapore Exchange (SGX), which has less than 1,000 listed companies.

Numbers listed above are as of August 2018.

Trading hours

Trading hours are very important when dabbling in the stock market. It’s important to take note of each market’s trading hours, as well as the time difference if it’s not in the same region.

Clocks Lot size

Every stock market has their own rules on the minimum number of stocks you can trade each time. In Hong Kong, each stock has its own minimum number of stocks tied to each purchase and sold in multiples of 100 or 1,000. In USA, there is no restriction on order sizes and you can buy as little as one share per trade. On our local shores however, a minimum order size of 100 stocks is required per trade on SGX.

Lot size Order type

Knowing the steps to trade is as important as understanding when to trade. Order types are instructions given to brokers to make the trade at a specific time or price, or both. Knowing the different order types will help you understand the value your investments after the trade is made. The common order types are – Market Order, Limit Order and Auction Order.

Order types

Market Order

If you want to buy or sell a stock without any delay, you can place a market order. It allows you to buy or sell straight away at the best available price but does not guarantee a price. However, the price that you’re buying and selling at can deviate slightly from the last traded price, due to market changes.

Market orders are not allowed in Hong Kong, but available in Singapore and USA.

Limit Order

By placing a limit order, you are stating the price at which you wish to buy or sell a stock. If the price is not met, your order will not be executed.

Enhanced Limit Order (ELO)

This is similar to a limit order, except that the ELO allows an order to be matched up to 10 prices at one time. Any unfilled quantity after matching will be converted into a Limit Order and placed in the price queue.

Investment fees

Brokerage firms in Singapore are very similar in the fees they charge. Most local brokerages or trading platforms offer investments in the Hong Kong and USA stock markets, and charges different sales charge per trade. DBS Online Equity Trading platform offers different online rates for Singapore, Hong Kong and USA markets.

DBS OET fees Choosing the right vehicle

To start investing in global markets, you can open an online trading account. The DBS Wealth Management Account comes with a Multi-Currency Settlement Account, which allows you to monitor and manage your foreign exchange exposure as you trade in online equities overseas.

With all these in place, you are now ready to diversify your portfolio and perhaps dive into a new market to build up your investment pot.


Disclaimers and Important Notices

Deposit Insurance Scheme

Singapore dollar deposits of non-bank depositors and monies and deposits denominated in Singapore dollars under the Supplementary Retirement Scheme are insured by the Singapore Deposit Insurance Corporation, for up to S$100,000 in aggregate per depositor per Scheme member by law. Monies and deposits denominated in Singapore dollars under the CPF Investment Scheme and CPF Retirement Sum Scheme are aggregated and separately insured up to S$100,000 for each depositor per Scheme member. Foreign currency deposits, dual currency investments, structured deposits and other investment products are not insured.