Invest on ESX
Why Invest?
Whether you are an individual or institution (corporates, funds etc.) investment is one of the critical factors to secure and grow the value of your assets in the medium and long term.
As savings held in cash will tend to lose value in the long run, investing can help to protect the value of your assets.
Investing is also an effective way to have your cash work for you and gradually build wealth. Investment provides individuals and corporations the opportunity to contribute, share risks and rewards from the growth of the investment without the need to be involved in the day-to-day management and operation of the business.
Investment is also a key tool to diversify your portfolios as it allows you to invest in various asset classes according to your preferred risk tolerance. Investment encourages you to save and provides you with the opportunity to get higher returns on your savings. Investing in listed companies will also allow you to own various public assets that have national socio-economic significance.
A key benefit to investing on ESX is transparency. As information on securities and prices are publicly available, investors can make informed decisions based on appropriate disclosures and real-time market data. The regulatory oversight of ESX maintains market integrity. This ensures that participants are adhering to trading practices. The ESX trading platform will be linked to a fully electronic central securities depository (CSD) to ensure efficient post-trade clearing and settlement processes from the launch of the exchange.
Opportunities and Risks of Investing in Equity Market
Investing in listed shares, also known as investing in the ‘stock market’, offers a range of potential benefits. Here are some of the key benefits of investing in listed shares:
Potential for Capital Appreciation: Over the long term, stocks have historically provided the potential for significant capital appreciation. This means your initial investment can grow in value, potentially outpacing inflation.
Dividend Income: Many listed companies pay dividends to their shareholders. These dividends can provide a steady stream of income, making stocks attractive to income-seeking investors.
Portfolio Diversification: Investing in a variety of stocks allows you to diversify your portfolio. Diversification can help spread risk, as different stocks may react differently to economic and market conditions.
Liquidity: Listed shares are generally highly liquid, meaning you can easily buy and sell them on ESX compared to other private companies. This liquidity allows you to convert your investments into cash relatively quickly.
Ownership in Established Companies including Large Public Enterprises: When you invest in listed shares, you become a partial owner of the company. This can give you a sense of ownership and participation in well-established businesses.
Transparency and Information: Publicly traded companies are required to provide regular financial reports and disclosures to the public. This transparency gives investors access to detailed information about a company's operations and financial health.
Regulation and Investor Protection: ESX markets are regulated to protect investors and ensure fair trading practices. These regulations provide a level of security for investors.
Investment Choice: The ESX offers a wide range of investment choices. You can invest in individual stocks, exchange-traded funds (ETFs), or mutual funds, each with its own risk-return profile.
It's important to note that while there are several benefits to investing in listed shares, there are also risks involved. Stock prices can be highly volatile, and there are no guarantees of returns. The value of investments can go up and down, and as an investor, you may potentially lose money.
Therefore, it's essential to consult professional advisors, conduct thorough research, have a well-defined investment strategy, and consider your risk tolerance before investing. Diversifying your investments across different asset classes can also help manage risk.
Central Securities Depository (CSD)
The Central Securities Depository acts as the central place where securities traded on ESX are deposited in an electronic registrar. The CSD provides safe custody for securities, assigns a unique securities identification number to investors, and allows efficient clearing and settlement of securities transactions.
How do investors access the market ?
ESX is a fully electronic and intermediated market. To access the markets investors should have a CSD account and select a licensed member of the exchange/brokerage firm (ESX Trading Member) to transact on the platform.
Investors can choose and appoint a licensed member/broker from members directory of ESX website
The licensed member will support the investor in acquiring the relevant CSD account number.
Investors will be required by the licensed member to provide relevant KYC information and forms.
After adding necessary funds to its investor account, in line with guidance provided by the member, the investor can start trading by placing orders to buy or sell securities through the licensed member of ESX.
An investor can monitor market prices through information platforms provided by the exchange on its website, mobile application, trading tools, and other information gateways provided to the member.
Investors may be able to have an intermediated direct market access through the licensed member’s website and mobile application, in line with the rules and procedures of the exchange.