Stock-broking used to be a lucrative business in Singapore because brokerage commission was fixed at 1%.  After the commission was liberalised in year 2000, brokerage dropped to not more than 0.5%.  Stock-broking is now a commodity-like business that competes on price.  Businesses that compete on price generally don’t make good investments.

Newspapers were good businesses in the past because they were the main avenue to get news.  With the proliferation of news websites, there are now many ways to obtain news.  News are also received earlier online.

‘The Straits Times’, which is the predominant newspaper in Singapore, faces such challenges.  It is owned by Singapore Press Holdings.

With the advent of emails, traditional mails are on the decline.  On the other hand, the rise of e-commerce has increased the number of parcels that are delivered through mail.  Such is the mixed fortune of Singapore Post.

‘Inevitable’ businesses make good investments.  These businesses have toll road-like economic characteristics.  They face little if any competition and are able to pass on price increases to consumers.

Examples of such businesses are ComfortDelGro, SBS Transit and SMRT.  Due to their monopolistic position, these businesses are price-regulated i.e. government approval (Public Transport Council) is required before prices can be raised.  These businesses happen to be capital intensive.

Updated on 28 March 2019