DBS Singapore STI ETF Debut

After I wrote on the subject on 9 February, DBS Asset Management (DBSAM) priced the initial issue price at $1.62 per unit on close of offering period at 12 noon on 18 February 2009.


The Straits Times Index (STI) from the close of offering period to announcement of the initial issue price on 23 February were:


18 Feb           1651

19 Feb           1629

20 Feb           1594

23 Feb           1630


Average STI for the 4 days was 1626 points.


Trading of the DBS Singapore STI ETF on the SGX started today.


Investors can trade DBS Singapore STI ETF in lot size of 100 units, meaning that you can invest in it from as low as 100 units. However there is one catch. If you buy 100 units of it on-line you will need to pay a minimum commission to the stock brokerage house and all other charges such as clearing fee, SGX trading fee and GST.


e.g.     Buy 100 units    Cost at $1.66           $166

                                   Commission            $25 (minimum)

                                    Clearing Fee           $0.07

                                    SGX Trading Fee     $0.01

                                    GST                         $1.76

                                    Total                       $192.84


            Buy 1,000 units   Cost at $1.66         $1,660

                                      Commission          $25

                                      Clearing Fee          $0.66

                                       SGX Trading Fee    $0.12

                                      GST                         $1.80

                                      Total                       $1,687.58


It will make more sense to buy a single trade of 1,000 units instead of 10 trades of 100 units each to save on paying commission charges.


At the close of trading today, the closing price of DBS Singapore STI ETF was $1.67 which was 5 cents higher than the initial issue price. The trading volume was 141,400 units. This was lower than streetTRACKS® Straits Times Index Fund of 367,000 units. The price for this similar STI ETF product was also lower at $1.64.


When investing in STI ETF, investors have a choice of two products to consider now when you are using cash. If you plan to use CPF funds, then streetTRACKS® Straits Times Index Fund is the only choice at the moment.


Written on 2/25/2009 6:55 PM


Copyright © 2009, the author known as LKT in Singapore.


The material presented is intended to be general and written in layman’s language as much as it is possible. The author shall not be liable for any direct or consequential loss arising from any use of material written. Please seek professional advice from your financial advisor or financial institutions on material written covering financial matters.

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