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MarketScreener Homepage  >  Equities  >  Singapore Stock Exchange  >  Singapore Exchange Limited    S68   SG1J26887955


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Singapore Exchange third quarter profit hits 13-year high as trading volumes surge amid pandemic

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04/24/2020 | 12:24am EDT
An employee works at a front desk of the Singapore Exchange head office in Singapore

Singapore Exchange's profit jumped 38% to a 13-year high in the January-March quarter as extreme market volatility amid the coronavirus outbreak boosted equities and derivatives trading volumes.

Other exchanges are also likely to benefit from the rising volatility, although SGX's strength in derivative products means it is particularly well placed among Asian bourses to do so.

"With uncertainty around the eventual economic and financial impact of COVID-19 and path to recovery, these elevated levels of volatility are likely to be prolonged," Chief Executive Loh Boon Chye said in a statement on Friday.

Net profit for SGX's third quarter rose to S$137.5 million ($96.5 million) from a year earlier. Total revenue rose 29% to S$295.8 million, a record according to Refinitiv data.

The strong results bode well for its main rival in Asia, Hong Kong Exchanges and Clearing (HKEX), which reports January-March results next month and has seen double-digit percentage increases in trading volumes this year.

Its net profit could rise 6.8% to HK$2.8 billion, according to an average forecast from two analysts polled by Refinitiv. That would also be a record level for quarterly profit, even if the climb in earnings is less marked than Singapore Exchange's jump.

"There is a tendency for Singapore do to better than Hong Kong in this sort of environment. Hong Kong is very equity focused, while Singapore has a wider and more established range of derivatives products, which will be used for hedging," said Michael Wu, an analyst at Morningstar.

SGX said revenue from currencies and commodities derivatives trading climbed 23%, accounting for 14% of overall revenue, while revenue from equities derivatives trading rose 24% and accounted for 36% of overall revenue.

Citi analyst Robert Kong cautioned in a note that Singapore bourse data so far in April suggested the daily average value of equities securities trading had fallen 37% from March, while derivatives trading had also moderated from record levels seen last month.

"We still prefer SGX over banks but recognize that moderating turnover suggests a less upbeat earnings trajectory going forward," he said. He cut his rating on the stock to 'neutral' from 'buy', saying the shares are "fairly valued post rally".

SGX's shares were down 3% on Friday but are still up more than 10% this year compared with a 22% slump in the main Straits Times index.

By Anshuman Daga and Alun John

Stocks mentioned in the article
ChangeLast1st jan.
DEERE & COMPANY 0.91% 159.09 Delayed Quote.-8.59%
EXTREME CO.,LTD. -4.25% 1532 End-of-day quote.-21.44%
HONG KONG EXCHANGES AND CLEARING LIMITED -1.83% 363.8 End-of-day quote.43.79%
RISE, INC. -3.13% 31 End-of-day quote.3.33%
SINGAPORE EXCHANGE LIMITED 1.09% 8.35 End-of-day quote.-5.76%
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Sales 2020 1 021 M 735 M 735 M
Net income 2020 452 M 325 M 325 M
Net cash 2020 815 M 586 M 586 M
P/E ratio 2020 19,8x
Yield 2020 3,85%
Capitalization 8 926 M 6 417 M 6 420 M
EV / Sales 2019
EV / Sales 2020 7,94x
Nbr of Employees 877
Free-Float 76,3%
Duration : Period :
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Technical analysis trends SINGAPORE EXCHANGE LIMITED
Short TermMid-TermLong Term
Income Statement Evolution
Mean consensus HOLD
Number of Analysts 15
Average target price 8,27 SGD
Last Close Price 8,35 SGD
Spread / Highest target 11,1%
Spread / Average Target -0,97%
Spread / Lowest Target -13,4%
EPS Revisions
Boon Chye Loh CEO & Non-Independent Executive Director
Chong Seng Kwa Non-Executive Chairman
Lay Chew Chng Chief Financial Officer
Tinku Gupta Chief Technology Officer & Senior MD
Thaddeus Thomas Beczak Independent Non-Executive Director
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