Findings about trading behaviour in Singapore

I did a survey recently by Investment trends. Okay, maybe not recently but I remembered I was lured by some prizes if I took part in it. Since I've got time to spare, I took part in the online survey. I can't even remember what prize that is but they did promise to send me a report on the trading behaviour in Singapore. I thought It'll be quite interesting to list out the summary of the findings. After each point mentioned below, the comments following the points are from me, not from the report.

1. There are 290,000 active share traders in Singapore.

That is based on their model, presumably from the sample of survey participants. Active, in their definition, is someone who had put in a minimum of one trade in the past 12 months and have the intention to carry on trading.

2. Out of 290,000 individuals, they hold at least 450,000 trading accounts.

This means that each one is holding 1.55 accounts on average. Haha, I think I'm holding 4, though I really only use 2. Why have so many accounts? It comes from bad experience in my warrants trading days. I used to rely on solely one account, but it always lagged due to the high volume of trading (it's in the final hours of the bull). Don't try it, it get give you a heart attack! After some bad experiences, I had several backup accounts just in case I need to get through my orders. It's also to overcome the buy/sell limit when I first started. No longer a problem these days though.

3. The top 3 brokerage firms are Phillip securities, UOB Kay Hian and DBS vickers, in descending order of primary market share based on the survey

Interested to know the rest? After the three, it's followed by OCBC, Lim & Tan, CIMB-GK, Kim Eng and finally Saxo bank. I wonder where is Citi bank. I thought they have a real advantage over others - they allow orders that are good up to 1 week! It's very useful for deep sea fishermen like me, haha :)

4. 77% of participants trade local blue chips, 69% trade other local shares, 22% trade IPOs, 20% trade US shares, 20% trade indices, 15% ETF.

I only list out the few interesting statistics. 22% trade IPO...I think we're not near the end of the bull yet. It must be higher before we're nearing the final hours of the bull. As can be seen, not a lot of liquidity in ETF.



5. The average age of a share trader is 40 yrs old. Mode is 35-39 (20% of participants). Second highest age range is 30-34 (19% of participants). The age range is a skewed normal distribution, with peak at 35-39, a short left tail and a tapering longer right tail.


I think with more money, you tend to become more active in trading, so it's not surprising to see the peak at the 30-45 yrs old range. More than half comes within that range. What about retirees from age 55 and above? It took up 9% of the participants.



6. There are 29,000 FX traders in Singapore, defined as having placed at least 1 trade in the past 12 months and have intention to carry on trading. FX market is characterised by high frequency trading, with half having traded 30 times or more per month and closing their position within 4 hours. Only 9% of fx traders leave their positions over a week. Two thirds of most recent trades are conducted over EUR/US, USD/JPY or GBP/USD.


I think the data are interesting to know. The three most popular currency pair are listed above. EUR/USD is the most popular one, with 40% having trade this pair. I've not done FX before and probably will not try. I've seen how fast it moves (when it moves) and because it's near 24 hours trading, almost every day of the week, you can't really go anywhere but get stuck with the screen. I'm sure people like this kind of market, it's just not my thing.



7. For FX and CFD traders, 37% use the internet to do research. 33% uses newspaper, 33% uses other newspaper, 32% uses SGX site and 31% uses forums and blogs. 42% uses analyst research/recommendations.


Radio shows, TV shows are ranked rather poorly for those doing research in fx and cfd trades. I wonder how true this is for local shares trading/investing, haha :) Of interest is the almost similar % of influence in forums/blogs as compared to other more conventional sources of information.



8. There are 10,000 CFD traders locally, defined as having placed at least 1 trade in the past 12 months and have intention to continue trading. Local shares are the most traded instrument among those who traded less than 30 times per month. For those trading more than 30 times per month, only 44% trade local shares. Average returns of frequent traders (more than 30 times/mth) is 7% over their initial deposit in the last 12 months. For less frequent traders (less than 30 times/mth), the average return is 1%.


Among the frequent traders, there are two peaks. 12% made 6-10% pa and and almost equal percentage of them lost 21-30% pa. Wow...it's like cha cha. Move ahead two steps, move back 2 steps.

9. 27% of CFD traders went short in their last trade. More than 75% of CFD traders use TA to decide which trade to make. 38% uses analyst research, 35% uses business news and 33% uses FA.


I think this is one of the main advantage of CFD - the ability to go short on counters without the borrowing and having access to leverage. More CFD traders use TA than FA - obviously? Those who are into longer term positions might want to hold actual shares rather than using CFD. The most interesting thing is that there are those who use instinct/gut feeling, and that makes up 18% of the participants. Haha, instinct and gut feel are for those who have a substantial amount of experience doing this - for all others, they have no right to gut feel. Especially newbies.