SGX Lowers Minimum Lot Size from 1,000 to 100 Shares Today

SGX Lowers Minimum Lot Size from 1,000 to 100 Shares Today

Photo credit: Jonathan Choe

The Singapore Stock Exchange (SGX) has reduced its standard board lot size of securities from 1,000 to 100 units starting today. This means investors now only need to invest in minimum lots of 100 shares, putting many expensive blue-chip stocks within reach for normal retail investors.

For example, at over $23 a share, investors would have had to stump up $23,000 just to purchase one lot of United Overseas Bank shares (SGX: U11) before. Now the minimum investment sum is a more accessible $2,300.

What This Means for Investors

  • Rather than speculating in riskier penny stocks, investors now have safer blue-chip options to include in their stock portfolio
  • Young investors who typically have less capital can now afford a wider range of stocks than previously available
  • The lower minimum lot size will improve liquidity and trading volumes for the overall market
  • Investors with odd lots (less than 1,000 shares) previously can now trade them in the regular market instead of the odd lot market, where share prices are traded at a discount. Odd lots are now reduced to 99 shares and below

Magnus Bocker, CEO of SGX, said: “The reduced board lot size will benefit all investors and make it easier to invest in blue chips and index component stocks which tend to be higher-priced. It will also allow institutional investors to better manage their risk exposures through finer asset allocation of funds.”

Adam Wong is the editor-in-chief of The Fifth Person and author of the national bestseller Lucky Bastard! which made the Sunday Times Top 10 Bestseller's List in 2009 and Value Investing Made Easy which made the Kinokuniya Business Bestseller's List in 2013. In 2010, he appeared on U.S. national television on the morning show The Balancing Act. An avid investor himself, Adam shares his personal thoughts and opinions as he journals his investing journey online.

7 Comments

  1. SmartPassiveCashFlow

    January 19, 2015 at 10:29 am

    Good move by the exchange. Applause to them. However it would be better if this is being announced during the start of a bull market where retail players can take part in the bull move. The reduction of the shares per lot also create more movement and more liquidity in the market. Only concern is that ‘is this the start of the sell down”.

    • The Fifth Person

      January 19, 2015 at 11:10 am

      Well, we won’t know with certainty which way the market’s going to move in the next few months (or ever, actually!), but, yes, this move will boost liquidity and benefit investors overall.

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