From petroleum to airports to a conglomerate that operates 7-Eleven, Singapore investors can now get a slice of some of Thailand’s top blue chip companies through Singapore Depository Receipts (SDRs).
A new type of investment product that lets investors access overseas markets through SGX, the SDRs first launched on 30 May 2023. The first ones available are Thai SDRs under the Thailand-Singapore DR linkage.
Here are 6 reasons why you should consider investing in Thai SDRs:
1. Global Access
If you have been wanting to dip your toes into overseas markets but are not sure how to, now could be the opportune moment.
Thai SDRs offer Singapore investors the opportunity to invest in select Thai companies from the familiarity of SGX. The usual standardised trading rules and lot sizes apply, which helps streamline your investment process and consolidates global access in one familiar setup.
Through these SDRs, investors get exposure to the Thai market without the complexities of directly investing overseas.
Cost Simplification
When you purchase Thai SDRs via SGX, you see everything in SGD. There is no need to convert to a foreign currency, thus saving and simplifying costs for you. Not having to deal with forex rates also makes the price more transparent and gives you certainty when executing trades in SGD. On top of that, you will also receive your dividends in SGD.
Compared to directly trading Thai stocks on a foreign exchange, there are also lower costs involved with SDRs on SGX, as there are no additional fees, forex rates or management fees to deal with. The SGX exchange fees that apply to SDRs are: Clearing Fee of 0.0325% of traded value and Trading Fee of 0.0075% of traded value.
Convenience
Trading on the familiar grounds of SGX also means great convenience for the Singapore investor. As long as you have a valid brokerage account to trade SGX securities, you can easily participate in the Thai market with no restrictions on buying and selling.
All orders placed will be traded, cleared and settled during the market hours of SGX, and in SGD.
CDP Custody
By investing in Thai SDRs, your investments are custodised by the Central Depository (CDP) of Singapore, meaning that they are safe and in a centralised platform. Think of it as having your stocks in a centralised vault.
There is security and greater assurance knowing that your foreign investments in the CDP are regulated by the Monetary Authority of Singapore and helps protect you in the event a brokerage runs into trouble. It also helps streamline your investments, making it easy to track, buy, sell and receive dividends.
Flexibility
Should they wish to, investors have the option to convert their SDR holdings into the actual securities of the foreign companies represented by the SDRs, via the issuance and cancellation process through the SDR issuer.
It is possible to convert the SDR into underlying securities to trade on an overseas exchange through the cancellation process. Note that fees apply. Once this is done, you are able to exercise your right as a shareholder and potentially benefit from any corporate actions or events.
Transparency
All corporate actions such as announcements and annual reports about the SDRs will be published in English on SGX.
For instance, when one of the companies announces a corporate action event that leads to distributions, the SDR issuer will make an announcement on SGX to inform investors.
They are easily accessible and facilitate investors in making more informed decision making.
Learn more about the available Thai SDRs
Should you wish to diversify your portfolio with Thai SDRs, there are three blue chip companies across three key sectors currently available on SGX:
- AOT TH SDR (Airports of Thailand, SGX:TATD)
- PTTEP TH SDR (PTT Exploration and Production, SGX:TPED)
- CP All TH SDR (Charoen Pokphand Group, SGX:TCPD)
Find out more about them in detail.
Investors can look forward to seven more Thai SDRs, which will be made available by the first quarter of 2024.
If you are keen to start investing in Thai SDRs, simply open a Syfe Brokerage platform, explore the available SDRs, and start building a well-diversified portfolio.
Enjoy fee rebates* when you invest in SDR trades from now until August 31, 2024.
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