SINGAPORE: The Singapore Exchange reported on Friday (Jul 27) that its full-year net profit rose 6.9 per cent to S$363.2 million, its biggest in a decade, supported by record derivatives trading volumes and bond listings.
The net profit is the highest since the S$444 million logged in 2008, and was helped by efforts over the past year to grow its asset classes and markets, advance its securities market and optimise resources, the bourse operator said.
Revenue came in at S$844.7 million for the fiscal year ended June, 5.5 per cent higher than the previous year.
Looking forward, however, escalating global trade tensions and moderating global growth could result in higher market volatility, SGX cautioned.
"FY2018 was a record milestone in our financial performance ... All three core businesses registered higher revenues," said SGX CEO Loh Boon Chye.
"As we move into the new financial year, our strategy will focus on cementing our position as a multi-asset exchange, while growing our international presence and widening our partnerships and networks," he added.
Ms Pan Jingyi, market strategist at IG Markets said that SGX’s move to continue building links with other exchanges globally is “wise”, considering potential challenges from geopolitical risks.
She cited the possibility of the US following through with another US$200 billion in tariffs in late August as a potential downside risk.
“It’s a bit of an inflection point. On one hand you seem to have good growth, which is pretty sustainable at the moment, but at the same time, risks and clouds are gathering in the form of geopolitical risks and trade tensions which have led markets to be a little bit more concerned on whether we will see a slowdown come through in the second half of the year," said Ms Pan.
However, she continues to maintain a positive outlook on the bourse’s share price performance going forward.
“With the disturbance of the World Cup lifted, trading volumes are expected to rise and slightly help with the trajectory of the upside for SGX,” she said.
During the fourth quarter, net profit fell 1.8 per cent to S$83.7 million from the year-ago period, dragged down by an increase in operating expenses including higher staff costs, and a slight dip in revenue from its equities and fixed income businesses.
Group revenue for the quarter was S$213 million, up 2.5 per cent from a year earlier.
Equities and fixed income contributed revenue of S$101.5 million, down 0.6 per cent from a year ago.
Derivatives revenue rose 4.1 per cent to S$85.5 million.
SGX has proposed a final dividend of 15 cents per share, taking the total dividend for FY2018 to 30 cents per share. If approved, this will be the highest annual dividend in 10 years.
SGX also said that beginning fiscal year 2019, it will revise its dividend policy from one based on a percentage of net profit, to one based on an absolute amount.
SGX will pay a higher dividend of 7.5 cents per share, starting from the first quarter of its new financial year. Dividends will be paid quarterly and will be decided by the board.