Over the years, the Malaysian stock market has experienced periods of volatility due to both internal and external developments. For example, the benchmark FTSE Bursa Malaysia KLCI recorded more than 1% decline in 2019, the only country to record a decline in the region due to political uncertainties and poor financial earnings.
On the other hand, the Singapore stock market is known for its stability, with the Singapore Exchange (SGX) being home to high performing blue-chip companies that have a track record of strong financial results and dividend yields.
Some investors in Malaysia who want to diversify their portfolio overseas may choose to invest in the SGX as they are familiar with the economy happenings in Singapore, due to it being a short distance away and having similarity in cultures and tradition.
By investing outside of Malaysia, they’re able to hedge against country-specific risks whether it’s political or economical as they’re not relying only on the ringgit. In the event of the Malaysian stock market fluctuating, other foreign investments can balance it out. Besides, they are also able to enjoy potential foreign exchange gains with the Singapore dollar strengthening against the Malaysian ringgit.
Here are five things you may want to consider before investing in the SGX.
#1 Fees, Tax And Other Charges
To invest in the SGX, you will need two accounts – the Central Depository (CDP) Account and Trading Account.
Managed by the SGX, the CDP Account helps you keep the shares you’ve bought securely. You need to open a Trading Account with a brokerage of your choice to start buying and selling shares on the exchange.
To open these accounts, you need to be at least 18 years old and not an undischarged bankrupt. You may need to furnish documents such as your identity card, valid passport and bank statement or original utility bill as proof of residential address.
There are many retail brokers that you can open a trading account with. When choosing a broker, you can consider factors such as the commission, fees and the investment features of the platform.
Additionally, some countries impose withholding tax on dividends, in which a company that makes a certain type of payment such as investment earnings to a non-citizen withholds a percentage of the payment to pay to the government.
The Singapore government currently does not impose withholding tax on dividends.
#2 Get Familiarised
Depending solely on investments in one market can pose certain risks in the event of uncertainties in the country. However, it may have taken a while for some investors to take the leap and invest outside of Malaysia. This is because they’re familiar with the local economy and market, creating a home biasness.
If you decide to break the bias, you can explore foreign investments and diversify your investments and spread out risks. Similar to when you first started investing in Malaysian markets, you will need to do your due diligence and research thoroughly before investing in the SGX.
Perhaps you can start with companies that you already heard of and whose products or services you’re using and work from there. You can also try to understand the sector performance in the SGX, specifically the sectors dominating the market such as real estate, banks and shipping companies.
Each country has its own economic climate and risks, so it’s important to monitor the economic events in the foreign country you’re investing in and how your foreign investments work with your local investments.
#3 Access To Mature Markets
As a country that’s still developing, Malaysia offers investors potential for larger growths but it also comes with more risks as compared to investing in a developed or mature market.
When investing in developed markets such as Singapore, you get to enjoy more stable growth. You will be able to access large global companies on the markets and potentially enjoy returns investing in countries with strong economic growth such as Singapore.
The SGX offers investors a diversed market. There are more than 600 companies listed on the SGX, with CapitaLandInvest, DBS, Singtel and OCBC being among the top companies.
#4 Currency Gains
Typically, as Malaysians, most of our assets are in ringgit. We earn salaries in ringgit, buy properties worth of hundreds of thousands of ringgits and spend in ringgit.
Diversifying our investments allows us to gain exposure to major currencies and potentially enjoy currency gains.
Over the years, the Singapore Dollar has appreciated against the Malaysian ringgit, with the exchange rate standing at 1SGD to approximately 3.29 MYR, as of 24 April 2025.
#5 Well-Regulated
Singapore is reputed as one of the most stable financial hubs in the Asian region. The SGX has high international representation, with approximately 40% of the nearly 800 companies hailing from beyond Singapore’s shores tapping both local and international investors who are drawn to the benefits of a recognised and regulated exchange.
On top of that, the Monetary Authority of Singapore ensures that the SGX offers a well-regulated and transparent platform for investors to trade on.
Read Also: Guide To Investing In Stocks In Malaysia
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