The stock market in Singapore is worth over $700 billion US dollars. But while there are plenty of domestic investment opportunities available here, many Singaporeans choose to look into foreign markets too. Not only do markets based in places like London and New York offer some of the most highly valued companies in the world, going global provides opportunities for all sorts of diverse trading decisions. Here are some top tips for working out how to get the show on the road.
Get clued up on the law
Firstly, there are plenty of legal considerations you’ll need to be aware ofbefore starting your foreign trading career. Some countries don’t permit foreign investment, either at all, or in certain business sectors.In China, for example, there are almost 50 different sectors which only Chinese nationals can invest in. In other countries, foreign investors may have to alert a government department or a tax official about their intention to trade. In order to make sure you don’t fall foul of the law you may want to employ an accountant, or a solicitor based here in Singapore or abroad who has expert knowledge of the global markets.
Foreign news and data
Any Singaporean investor placing a trade on home turf shouldconsider using data to back up their decisions, and this still applies if you’re looking to investabroad. The main stumbling block, of course, is reading and understanding the relevant information. If your language is English and you want to invest on the Börse in Berlin, for example, you may struggle with the language barrier.
In some cases, it may be worth sticking to English-speaking markets like the US and the UK. Alternatively, you can use one of the market data services designed to enable global trading. Relevant stock info and advice is translated into English for you, and English-language articles produced by news sites – including Bloomberg – are included.
Understand a country’s economy
Each economy around the globe is different in one way or another, and this affects the ways in which individual company stocks perform. German companies, for example, are known in particular for their efficiency and consequent profitability – but their country’s interest rates and regulatory environment is set by the wider European bloc, which can drag company performance down and cause a headache for investors trying to identify a good deal.
For a foreign investor like you, this is all new – and it takes some time to get used to. It cantake months or even years for a foreign investor to work out all of the quirks in another country’s system, and no amount of research can impart all this knowledge at once. Research can, however, give you a good starting point, and this is yet another example of where a stock information service can be useful.
So, while the Singapore stock market may hold lots of promise, it’s a good idea to think globally too. With all sorts of trading opportunities available around the world, there’s plenty to consider. And by doing your research to stay within the law and get the data and news sources you need, you can give your new international trading project the best possible chance of success.