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Analysing stocks in Singapore
Use technical, fundamental analysis and basic charts to assess stock performance.
Analysing stocks in Singapore
At a Glance
Stock quote
Contains key information and components of a stock.
Technical analysis
Allows you to study and predict the price movement of a stock.
Fundamental analysis
Helps to determine the value of a stock by looking at company’s financials.
What are Stock Quotes
If you are keen to invest in stocks, understanding the components of a stock quote is a good starting point. It contains essential transaction information of a stock on a particular day and is usually presented in a table.
Components of a Stock Quote
| Component | Example | What it means |
|---|---|---|
| Counter name | DBS | Name used for trading on the counter |
| Cde | D05 | Code: assigned to the stock for easier reference and identification of the counter |
| Rmk | - | Remark: indicates the stock’s status as suspended, trading halt, delisted etc |
| BLot | 100 | Board Lot: standard number of stocks for trading; current board lot size for SGX is 100 shares |
| Last | 20.380 | Last traded stock price |
| Chg | +0.030 | Change: change in last traded stock price from the previous day’s closing price |
| % | +0.147 | Percentage change in last traded stock price from the previous day’s closing price |
| Vol | 2,468.5 | Volume: number of stocks (in thousands) traded so far during the trading day |
| BVol | 4 | Buy Volume: number of stocks (in thousands) buyers are queueing to buy at buying price |
| Buy | 20.370 | Buying price: stock price at which buyers are willing to buy at |
| Sell | 20.380 | Selling price: stock price at which sellers are willing to sell at |
| SVol | 8.4 | Sell Volume: number of stocks (in thousands) sellers are queueing to sell at selling price |
| Open | 20.350 | Traded stock price at the start of the trading day |
| High | 20.420 | Highest traded stock price so far during the trading day |
| Low | 20.340 | Lowest traded stock price so far during the trading day |
| Value | 50,321,102 | Dollar value of stock traded so far during the trading day |
| Sector | FIN | Industry in which the stock belongs to |
Market depth
While a stock quote displays the current buying and selling prices of a particular stock at any one time, a market depth chart shows real-time orders bidding to buy or asking to sell the stock at different prices at a single point in time during a trading day.
When there are many traders queueing to buy and sell a stock at various prices, this stock is considered liquid. This is good for investors because higher depth suggests better liquidity.
Technical Analysis
Technical analysis is used to determine when and at what price to buy and sell a stock. It involves studying statistics generated by market activity such as historical prices and trading volume to predict stock price movement.
Tools used in technical analysis include market depth and stock charts, which present essential transaction information of a stock over a time period.
Stock Chart
- Time interval/duration
The x-axis can display from minutes to years’ worth of stock price history. In this case, it spans a year from January to December. - Chart type
Charts can appear in various forms such as line, candlestick, stairstep, to name a few. In this case, it is a bar chart. - Price
The length of the vertical bar shows the stock price range for that day. The small horizontal dash on the left of the vertical bar indicates the opening price for that day while the one on the right indicates the current price (assuming trading day has not ended) or closing price for that day.
A green bar indicates the closing price is higher than the opening price; a red bar indicates the closing price is lower than the opening price. - Volume
These vertical bars indicate the volume of shares traded for that day.
Green represents the stock volume traded was higher than the day before and red when the stock volume traded was lower. - Support and resistance
Support is a price level where demand is being perceived to be high enough such that the stock price is not expected to fall below the level. Resistance, on the other hand, is a price level where supply is being perceived to be high enough where the stock price is not expected to rise further.
Fundamental Analysis
Fundamental analysis attempts to measure the intrinsic value of a stock. It takes into consideration the macroeconomic environment of the overall economy, industry conditions, as well as financials and management of companies. The goal of fundamental analysis is to identify stocks with growth potential.
Here are some important financial terms to understand in fundamental analysis.
| Financial term | Definition | Significance |
|---|---|---|
| Return on equity (ROE) | Earnings generated relative to the amount invested by shareholders Net income / Shareholders’ equity | ROE is a measure of a company's profitability. It is useful for evaluating the company's efficiency in managing its shareholder's equity. A high ROE indicates the company is effective in using shareholders' investment to generate earnings. |
| Earnings per share (EPS) | Earnings of a company allocated to each outstanding share of common stocks (Net Income - Dividends on Preferred Stock) / Average Outstanding Shares | It determines a company's profitability and its ability to distribute dividends or reinvest the funds for growth. |
| Price-to-earnings ratio (P/E ratio) | Ratio of a company's market price in relation to its earnings per share. It is also known as price multiple or earnings multiple. Market price per share / Earnings per share | It indicates how much an investor is willing to pay per dollar of earnings. It is also an useful indicator of expectations of growth opportunities. When comparing P/E ratios, it is important to compare companies of the same industry and characteristics. |
| Price-to-book ratio (P/B ratio) | Ratio of a company's market value in relation to its book value. Market price per share / Book value per share | P/B ratio is one of the factors that can help determine if a stock underpriced or overpriced when compared to its book value. |
| Dividend payout ratio | Ratio of earnings paid out in dividends to shareholders. Dividends per share / Earnings per share | It can be used to determine the sustainability of a company's dividend payout. |
| Dividend yield | Annual dividend payout relative to company’s share price Annual dividend paid per share / Share price | Measures the rate of return a shareholder receives for each dollar invested. |
| Operating cash flow ratio | The number of times a company can pay off its current liabilities with its operating cash flow. Cash flow from operations / Current liabilities | It can measure a company's ability to cover its current liabilities with cash generated from operations. |
| Market capitalisation (market cap) | Market value of all outstanding shares of a company. | It is a measure of the company's value. |
| Shareholders’ equity | A company's total assets minus its total liabilities. | It is also known as the book value of a company. A company with a positive shareholders' equity will generally be a safer investment choice. |
How to Invest
On the DBS Online Equity Trading platform.
Apply now
To open a DBS Wealth Management Account for trading.
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