As Singapore overtook Hong Kong to be the Asia’s top financial centre, there will be more opportunities for Singapore to engage with all kinds of financial activities. Now there are only 2 cities (London and New York) ahead of Singapore and being situating at Asia give the country a competitive edge.
The Monetary of Singapore will be at the back of this ranking and will continue to grow the country in the coming years. Being a small city and also a country, Singapore has limited land. Therefore, by going into the financial industry and make the country standout among all others. This is great move. Comparing building manufacturing plants, financial institutions do not require big space of land, instead the building can be built as top building. Movement of the financial services and transaction can also be digitised.
Financial knowledge you need to know for buying share
For those of you in share investment, there are some ratio of the listed companies you need to be aware of when you want to buy their share. Two of them are Price-to-earnings and Price-to-book value. You need to compare the company you are targeting with other similar companies in the industry or in general.
When industry benchmark of the Price-to-earnings ratio is 10, if your target company having a ratio of 20, it is not wise to buy it because its share price is too expensive. In simple term, it means that you are willing to pay $20 in order to earn $1. That is not very logical since you can earn $1 by buying similar company in the market at $10. Why do you want to pay more for that? Provided you believe that company share price will shoot up to the roof in near term.
For the price-to-book ratio, you can calculate the company book value by subtracting its liabilities from the assets, and divide it by number of share in the company.