Log in
E-mail
Password
Remember
Forgot password ?
Become a member for free
Sign up
Sign up
New member
Sign up for FREE
New customer
Discover our services
Settings
Settings
Dynamic quotes 
OFFON

MarketScreener Homepage  >  Equities  >  Nyse  >  MSCI, Inc.    MSCI

MSCI, INC.

(MSCI)
  Report
SummaryQuotesChartsNewsRatingsCalendarCompanyFinancialsConsensusRevisions 
News SummaryMost relevantAll newsPress ReleasesOfficial PublicationsSector news
The feature you requested does not exist. However, we suggest the following feature:

Singapore Exchange's growth ambitions undermined by MSCI's Hong Kong move

share with twitter share with LinkedIn share with facebook
share via e-mail
05/28/2020 | 05:09am EDT
FILE PHOTO: A man wearing a protective face mask walks past the Singapore Exchange

By Anshuman Daga

Singapore Exchange faces a threat to its growth strategy after index provider MSCI decided to shift licensing of many derivatives to Hong Kong, jeopardising the status of what was just a month ago one of the best sector performers globally.

SGX shares fell 7% on Thursday, extending the previous day's 11.6% slump - the biggest in over 16 years - as analysts cut their earnings forecasts after MSCI's surprise announcement on Wednesday. The bourse will find it challenging to find a near-term fix for the potential loss in business, analysts said.

Rapid growth in derivatives products, led by equities, has buoyed SGX's business over the past few years. It raked in record revenues over the January-March quarter, powered by a 24% jump in equities derivatives revenue that accounted for more than a third of the bourse's total.

While SGX has said it will launch new access products and drive revenue in other asset classes, analysts caution new competition in its lucrative derivatives segment and weakness in IPO offerings in a pandemic-hit market will hurt its prospects.

"Apart from the direct impact, we think there could also be competitive risks from overlapping products," CIMB analyst Yi Sin Ngoh said, referring to Hong Kong Exchange and Clearing Ltd's (HKEX) move to launch Asia and emerging markets derivatives contracts as part of a deal with MSCI Inc.

Loh Boon Chye, SGX's CEO told Reuters that both parties had agreed not to renew the MSCI derivatives licence, which ends in February 2021, and SGX was now looking to launch customised and structured products over the next year to help boost trading.

The stock performance of SGX for the year to early May was better than any major bourse globally, and well ahead of the broader market, Refinitiv data shows.

MSCI's contracts, which track gauges across Asian countries, with a big chunk tracking Taiwan, comprise 15% of SGX's equity derivatives volumes, and their loss could hit SGX's 12-month net profit by 10-15%.

"This comes on top of the potential competition from HKEX on the China A-share futures contracts, which most market participants see as inevitable and represent the biggest portion of SGX's derivatives volumes," said Gabriel Sacks, Asian equities investment director, Aberdeen Standard Investments.

HKEX struck a deal with MSCI last year to launch Chinese A-share futures https://www.reuters.com/article/us-china-msci-hedging/hkex-to-launch-futures-contracts-for-msci-china-share-index-idUSKBN1QS0GI, pitting it against SGX's flagship FTSE China A50 contract. HKEX has not yet received regulatory nod for the deal.

However, SGX's Loh has sought to allay concerns, saying the bourse's multi-asset strategy, acquisition of an independent index provider Scientific Beta in its biggest deal ever, and its stake in a forex trading platform will support growth.

SGX will still host MSCI Singapore Index contracts, which account for 6% of equity derivatives.

As SGX's revenue grows, the share of equities business to total revenue is likely to drop to the 60% range in 3-5 years from the current low 70s, Loh said.

But analysts say SGX could face a long-term setback from MSCI's latest Hong Kong move.

SGX will only be able to make up for a fifth of lost volumes through the launch of similar new products by the end of June 2022, Credit Suisse analyst Rikin Shah said.

"SGX's positioning as the sole Asian exchange offering equity derivatives across APAC markets will be put to the test."

(Reporting by Anshuman Daga, additional reporting by Tom Westbrook; Editing by Himani Sarkar)

Stocks mentioned in the article
ChangeLast1st jan.
CIMB GROUP HOLDINGS 7.41% 3.77 End-of-day quote.-26.80%
CREDIT SUISSE GROUP AG -3.97% 8.768 Delayed Quote.-33.09%
HONG KONG EXCHANGES AND CLEARING LIMITED 0.22% 270.2 End-of-day quote.6.80%
MSCI, INC. 1.91% 328.85 Delayed Quote.27.37%
SINGAPORE EXCHANGE LIMITED 1.60% 8.28 End-of-day quote.-6.55%
share with twitter share with LinkedIn share with facebook
share via e-mail
Latest news on MSCI, INC.
05/28Singapore Exchange's growth ambitions undermined by MSCI's Hong Kong move
RE
05/28China Tech Firms Seek Hong Kong Listings -- WSJ
DJ
05/28Two Chinese Tech Firms Prepare Hong Kong Listings -- Update
DJ
05/27Hong Kong lines up MSCI derivatives launch amid doubts on city's future
RE
05/27Hong Kong lines up MSCI derivatives launch amid doubts on city's future
RE
05/27SGX Shares Plunge After Discontinuation of MSCI Futures, Options Contract Nex..
DJ
05/26SINGAPORE EXCHANGE : To Discontinue MSCI Equity Index Futures, Options Contract ..
DJ
05/26MSCI : HKEX Signs Agreement with MSCI to License Indexes to Launch Asia and Emer..
AQ
05/26MSCI INC. : Entry into a Material Definitive Agreement, Creation of a Direct Fin..
AQ
05/26MSCI : Completes Private Offering of $1.0 Billion 3.875% Senior Unsecured Notes ..
BU
More news
Financials (USD)
Sales 2020 1 663 M - -
Net income 2020 555 M - -
Net Debt 2020 2 026 M - -
P/E ratio 2020 50,3x
Yield 2020 0,86%
Capitalization 27 490 M 27 490 M -
EV / Sales 2019
EV / Sales 2020 17,7x
Nbr of Employees 3 459
Free-Float 61,0%
Chart MSCI, INC.
Duration : Period :
MSCI, Inc. Technical Analysis Chart | MarketScreener
Full-screen chart
Technical analysis trends MSCI, INC.
Short TermMid-TermLong Term
TrendsNeutralBullishBullish
Income Statement Evolution
Consensus
Sell
Buy
Mean consensus OUTPERFORM
Number of Analysts 11
Average target price 315,38 $
Last Close Price 328,85 $
Spread / Highest target 11,0%
Spread / Average Target -4,10%
Spread / Lowest Target -25,5%
EPS Revisions
Managers
NameTitle
Henry A. Fernandez Chairman & Chief Executive Officer
Carroll Douglas Baer Pettit President & Chief Operating Officer
Linda S. Huber Chief Financial Officer
Jigar Thakkar Chief Technology Officer & Head-Engineering
Ben F. duPont Independent Director
Sector and Competitors
1st jan.Capitalization (M$)
MSCI, INC.27.37%27 490
S&P GLOBAL INC.19.03%78 297
MOODY'S CORPORATION12.64%50 144
RELX PLC-1.68%44 504
THOMSON REUTERS CORPORATION0.28%33 451
EXPERIAN PLC10.23%31 258