An idea, turned into a thing that can be owned, grown, and sold.
A company is a legal "person" separate from its founders. It can own assets, sign contracts, make a profit, and — crucially — be divided into shares of ownership. That last trick is what lets it raise money from strangers and outlive whoever started it.
From idea to owned thing
Registering a company turns a hustle into an asset.
Limited liability
You risk only your stake
If it fails, you lose what you put in — not your house.
It outlives you
Forever
A company can keep going long after its founder is gone.
Top 5 · most valuable companies
Ranked by market value, late 2025 (approximate).
Nvidia~US$4.5T
Apple~US$4.0T
Microsoft~US$3.7T
Alphabet (Google)~US$2.5T
Amazon~US$2.4T
Money WordLimited liability The rule that an owner can only lose the money they invested in a company — their personal wealth is protected if the business fails. It's what makes investing in strangers' companies safe enough to do.
Part 3 · Companies & markets
Owning a slice: shares
A share is a literal piece of a company — and a claim on its future.
Buy one share and you own a sliver of the whole business: its factories, its brand, its profits. If the company does well — paying dividends or growing — your slice is worth more. If it fails, your slice can fall to zero. That's the deal: real ownership, real risk.
One company, divided into shares
Own one share and a slice of everything is yours.
Dividend
Your cut
Many companies pay out part of their profit to shareholders.
Capital gain
Buy low, sell high
The other way to win: the share itself rises in value.
Local → Global
Singapore
1 share of an SGX company
=
Global
1 share of Apple
Money WordDividend A slice of a company's profit paid out to shareholders, usually as cash. Not every company pays one — some reinvest it all to grow faster.
“
Know what you own, and know why you own it.
— Peter Lynch, investor
Part 3 · Companies & markets
Why companies sell shares
Because selling part of your company is often the fastest way to grow it.
A growing company needs money — for factories, staff, expansion. It can borrow it (debt) or sell ownership (equity). Selling shares brings in cash that never has to be repaid; the price is giving away a slice of future profits and control. Borrowing keeps control but must be repaid with interest.
Two ways to raise money
Every company chooses some mix of these.
Debt
Borrow & repay
Cheaper if it works, dangerous if profits dip — you still owe.
Equity
Share the upside
No repayment, but new owners share every future profit.
Local → Global
Singapore
A startup raising its first round
=
Global
Google selling shares to the world
Money WordEquity Ownership in a company. When you "raise equity," you sell part of the company for cash instead of borrowing.
“
Capital isn't scarce; vision is.
— Sam Walton, founder of Walmart
Part 3 · Companies & markets
What is an IPO?
The day a private company throws open its doors, sells shares to the public for the first time — and often raises a fortune.
IPO stands for Initial Public Offering. Until that day, a company is private — owned by its founders and a few investors. An IPO lets anyone buy a slice, turning private owners into public shareholders and handing the company a wall of cash to grow with.
From private company to publicly traded — in 5 steps
What actually happens between "we want to list" and shares trading on the exchange.
Why do it?
Raise capital
The company sells new shares and pockets the cash to expand.
The trade-off
Total scrutiny
Going public means revealing your numbers and answering to shareholders.
Top 5 · biggest IPOs in history
Ranked by money raised at listing (approximate).
SpaceX~US$75B · 2026
Saudi Aramco~US$25.6B · 2019
Alibaba~US$21.8B · 2014
SoftBank Corp~US$21.3B · 2018
NTT Mobile~US$18.1B · 1998
Money WordUnderwriter The investment bank that prices new shares, buys them from the company, and resells them — guaranteeing the company gets paid even if demand is soft.
Part 3 · Companies & markets
An IPO in action
Watch the numbers move on the day a company goes public.
Say a Singapore company offers 100 million shares at S$1 each. It raises S$100 million. On listing day, demand is hot and the price jumps to S$1.50 — but the company already has its cash; now investors are trading among themselves. Globally the same script runs, just with more zeros — SpaceX's 2026 listing raised US$75 billion.
The numbers on listing day
The company raises money once; the price then floats.
The "pop"
+50%
The day-1 jump — exciting, but it doesn't add a cent to the company.
Who gets the cash
The company, once
After that, investors just trade shares with each other.
Local → Global
Singapore
An S$100m SGX listing
=
Global record
SpaceX's US$75B listing (2026)
Money WordMarket capitalisation A company's total value on the market: share price × number of shares. At S$1.50 × 100m shares, that's S$150m.
“
In the short run the market is a voting machine, but in the long run it is a weighing machine.
— Benjamin Graham, investor
Part 3 · Companies & markets
What is a stock exchange?
A giant, regulated marketplace where shares change hands.
An exchange is where buyers and sellers of shares meet — today almost entirely through computers. It sets fair prices, enforces rules, and makes sure trades actually happen. Singapore's is the Singapore Exchange (SGX); the giants are New York's NYSE and Nasdaq.
The marketplace in the middle
Buyers and sellers never meet — the exchange connects them.
Liquidity
Easy in, easy out
A good exchange lets you buy or sell fast at a fair price.
"Listed"
On the board
A listed company is one whose shares trade on the exchange.
Where it comes from
Bourse — Europe’s word for an exchange — comes from the Van der Beurze family, whose inn in Bruges was where merchants gathered to trade in the 1300s.
Money WordLiquidity How easily something can be bought or sold without moving its price. Cash is the most liquid; a house is not.
“
The stock market is filled with people who know the price of everything, but the value of nothing.
— Philip Fisher, investor
Part 3 · Companies & markets
Inside the exchange: the backend
When you press "buy," a hidden machine springs into action in milliseconds.
Behind the app is the order book — a live list of everyone wanting to buy or sell, and at what price. A matching engine pairs the highest willing buyer with the lowest willing seller in a fraction of a second. The "price" you see is simply the latest match.
The order book
Buyers (bids) on one side, sellers (asks) on the other — they meet in the middle.
Order book
The live list
Every bid and ask, stacked by price, updating constantly.
Matching engine
Microseconds
Software pairs buyers and sellers faster than you can blink.
Local → Global
Singapore
SGX's matching engine
=
Global
NYSE & Nasdaq systems
Money WordOrder book The real-time list of all the buy and sell orders for a share, organised by price. The gap between the best buy and best sell price is the "spread."
“
The big money is not in the buying and selling, but in the waiting.
— Charlie Munger, investor
Part 3 · Companies & markets
Clearing & settlement
A trade isn't really finished the instant you click. An invisible system makes it real.
After a match, the trade must clear and settle: the shares move to the buyer, the cash to the seller, with a clearing house guaranteeing neither side defaults. In Singapore the Central Depository (CDP) holds your shares; globally the giant is America's Depository Trust & Clearing Corporation (DTCC). This plumbing usually takes a day or two — "T+1" or "T+2".
The invisible plumbing
A trusted middleman guarantees the swap actually happens.
Clearing house
The guarantor
Steps between buyer and seller so neither can be cheated.
T+1 / T+2
A day or two
How long until the trade is truly final and irreversible.
Local → Global
Singapore
Central Depository (CDP)
=
United States
Depository Trust & Clearing Corp (DTCC)
Money WordSettlement The final step where ownership and money actually change hands after a trade. Until settlement, a trade is agreed but not yet complete.
“
Trust, but verify.
— Russian proverb
Part 3 · Companies & markets
How to actually buy a share
For the price of a meal, anyone can own a piece of the world's biggest companies.
You open an account with a broker — an app that connects you to the exchange. Deposit money, search a company, place an order. In Singapore, Tiger Brokers and moomoo made this cheap and easy; globally it's Interactive Brokers, Schwab and Robinhood. Fractional shares even let you buy part of one pricey share.
Four steps to your first share
The whole thing takes minutes on a phone.
Fractional shares
Buy a sliver
Own part of one expensive share — start with a few dollars.
Brokerage fee
Often tiny
Competition has pushed trading costs close to zero.
Then vs now
$0
What a stock trade costs today. In 1990 the same trade ran about $50 — the broker's cut competed down to nothing.
Money WordBroker A licensed middleman (today, usually an app) that places your buy and sell orders on the exchange for you.
Part 3 · Companies & markets
The scoreboard: indexes
One number that tells you how a whole market is doing.
An index tracks a basket of companies so you can see the market's mood at a glance. Singapore's Straits Times Index (STI) follows 30 of the biggest SGX companies. America's S&P 500 (Standard & Poor's 500) follows 500 giants and is the world's most-watched scoreboard.
Many companies, one number
An index bundles lots of shares into a single reading.
STI
Top 30
Singapore's headline index — the 30 biggest names on SGX.
S&P 500
500 giants
The global benchmark — when people say "the market," they often mean this.
A moment in history
The Dow Jones began in 1896 with just 12 companies. Not one of those originals is still in the index today — the "market" is always quietly replacing itself.
Money WordIndex A single figure that tracks the combined value of a chosen group of companies, used to gauge how a whole market is performing.
“
Don't look for the needle in the haystack. Just buy the haystack.
— John Bogle, founder of Vanguard
Part 3 · Companies & markets
Funds & ETFs
Buy hundreds of companies in a single click.
A fund pools many investors' money to buy lots of shares at once. An ETF (exchange-traded fund) is a fund you can buy on the exchange like a single share. One purchase of an S&P 500 ETF makes you a part-owner of 500 companies — instant diversification, tiny fees. Diversification is how you protect wealth — though, as Part 5 shows, big fortunes are first made through concentration.
One purchase, hundreds of companies
An ETF is a ready-made basket you buy in one click.
Diversification
Spread the risk
If one company sinks, the other 499 cushion the blow.
Low fees
Under 0.1%
Index ETFs cost a tiny fraction of what old-style funds charge.
The one number
0.03%
A typical S&P 500 ETF’s yearly fee — about $3 a year on $10,000. Old-style funds charged 30 times more.
Money WordETF An exchange-traded fund: a basket of many investments that trades on the exchange like a single share. The easy way to own a whole market at once.
“
Diversification is the only free lunch in investing.
— Harry Markowitz, Nobel laureate
Part 3 · Companies & markets
Crypto markets & exchanges
The same buying and selling — but in a wilder, always-open arena.
Crypto trades on its own exchanges (like Binance or Coinbase), 24/7, with no closing bell. Prices can swing double digits in a day. Unlike SGX, there's usually no central clearing house and far lighter rules — more freedom, but far more risk.
Stock exchange vs crypto exchange
Same idea — fewer guardrails.
Always open
24/7
No closing bell — prices move while you sleep.
Buyer beware
High risk
Lighter rules and bigger swings mean more ways to lose.
Insider tell
Crypto never closes — no bell, no clearing house, no last line of defence. The guard-rails a real exchange takes for granted simply aren’t there.
Money WordVolatility How much and how fast a price moves up and down. High volatility means big swings — bigger chances to win, and to lose.