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Retail investors are getting bullish on the Singapore stock market: Moomoo Singapore

Jovi Ho
·5-min read

According to Moomoo Singapore, 70% of survey respondents think they will trade Singapore stocks in the next six months.

Local blue-chips like DBS D05, Singapore Airlines C6L and Keppel Corporation BN4 have gone from strength to strength amid the Covid-19 recovery, and they join United Overseas Bank U11 and Oversea-Chinese Banking Corporation (OCBC) O39 as the top five most-traded local stocks by Moomoo Singapore users.

According to the digitalised brokerage’s data, 10.1% of investors who traded Singapore stocks more than doubled their initial investment.

However, Singapore stocks are sometimes described as boring or sluggish when compared to world-famous companies like Apple and Tesla, both listed on Nasdaq in New York City,

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The main reasons hindering users from trading Singapore stocks are concerns about market volatility and uncertainty, as well as their limited knowledge of the Singapore stock market, says Moomoo Singapore to The Edge Singapore.

Moomoo Singapore surveyed nearly 700 respondents and found that the biggest obstacles investors face are a lack of clarity regarding the investment value (17.5%), perception of low liquidity (13.3%) and the pursuit of higher returns elsewhere (11.4%).

Investors here are perhaps too critical of their home market. The Straits Times Index (STI) has returned 3.81% year-to-date on July 27 and 7.81% over the past year.

The STI, as the market barometer for Singapore, tracks the performance of the top 30 largest and most liquid companies listed on the Singapore Exchange (SGX) S68. Aside from the five names mentioned above, other constituents include agribusiness company Wilmar International F34, real estate investment manager CapitaLand Investment 9CI and telecom company SingTel Z74, among others.

With a three-year return of 12.36% as at July 27, investors who had bought into the index via an exchange-traded fund (ETF) would outperform even the most attractive fixed deposits or T-bills offered today.

According to Moomoo Singapore, the majority (70%) of respondents think they will increase their frequency of trading in the Singapore market in the next six months, hinting at optimism for a domestic economic recovery.

These potential investors, however, are discerning; the top three sectors they are keen on are financial and insurance, real estate and technology companies.

Staying ahead of the curve

Some 80% of respondents believe investor education on Singapore stocks will lead them to trade more local stocks, but 73% of respondents spend less than an hour each week on improving their investment knowledge.

Savvy Singaporean investors use financial technology to get ahead in their investing journey, but generational gaps mean investors here turn to different sources for market information.

More than 1,000 retail investors here took part in the Singapore Investors’ Financial Resilience survey, a separate study commissioned by Moomoo Singapore. Some 8.3% of respondents used advanced financial technology as an essential part of their investment process.

Most retail investors in Singapore (70%) find technology useful in their investment process, according to the survey supported by the Securities Investors Association (Singapore) (SIAS) and conducted by the Singapore Institute of Technology (SIT).

David Gerald, president and chief executive officer of SIAS, says investor education is crucial to equip retail investors with the skills needed to make informed investing decisions. “As technology becomes more pervasive, it is essential for retail investors to embrace technology so as to stay ahead of the curve and be informed about the latest developments. With the aid of technology, it is now easier for retail investors to do their research thoroughly and timely before investing.”

Retail investors of different ages, however, conduct their research differently. Social media is the top primary source of investment information for respondents aged 25 to 34, but this channel ranked third for those aged 55 to 64.

The reverse is true when it comes to traditional media like the newspaper, which is the most popular source of information for the older group.

That said, they share common ground in investment forums, the second-most popular choice among the two age groups.

Across generational lines, Generation Z and Millennials prefer social media while Generation X and Baby Boomers prefer the newspaper as their sources of investment information, notes Benjamin Goh, head of research at SIAS and senior lecturer at SIT.

That said, SIAS’s Gerald stresses the importance of credible sources that provide timely and accurate content. “SIAS hopes to partner more trusted and responsible industry players to provide investor education programmes for the different demographics.”

The study was released at Moomoo’s flagship event, MooFest, on July 15. Nearly 1,000 Moomoo Singapore users visited MooFest 2023 at Suntec City Convention Hall, marking the brokerage’s largest community event of the year.

While access to market information is critical to investing, more can be done to educate investors, says Moomoo Singapore. Gavin Chia, chief executive officer of Moomoo Singapore, welcomes potential traders to test their investing strategies with paper trades on the digitalised brokerage. The simulated trading allows investors to experiment without having to risk losing their capital on the actual stock markets.

Fractional shares, coming soon to the Moomoo Singapore platform, will also allow investors to “trade with a single dollar”, adds Chia.

With the north star of improving investor education, Moomoo Singapore has partnered with various industry leaders including SGX Group, SIAS and even online financial educators like DollarsAndSense.

“Our collective aim is to enhance the public’s literacy of the Singapore stock market, covering topics ranging from fundamental concepts to advanced strategies,” says Moomoo Singapore.

Photo and infographic: Moomoo Singapore

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