SGX's Q1 net profit up 1%, as derivatives business offsets decline in equities, fixed income

SGX's Q1 net profit up 1%, as derivatives business offsets decline in equities, fixed income

The Singapore Exchange (SGX) on Friday (Oct 19) reported a first quarter net profit of S$91.1 million, up 1 per cent from S$90.7 million a year ago, underpinned by a robust performance in its derivatives business. Brandon Tanoto reports.

SINGAPORE: The Singapore Exchange (SGX) on Friday (Oct 19) reported a first quarter net profit of S$91.1 million, up 1 per cent from S$90.7 million a year ago, on the back of revenues of S$208.9 million.

Its operating profit remained flat at S$106 million.

"Our first-quarter performance demonstrates the diversity and resilience of our multi-asset business," said SGX CEO Loh Boon Chye. 

"We achieved strong record revenues in our derivatives business, while our securities market saw a pullback along with other regional stock markets, amid heightened volatility and emerging market weakness. 

"During the quarter, we made strategic investments in companies that will enable us to expand our fixed income business and pursue the development of our digital marketplace for freight.” 

SGX's derivatives revenue jumped 21 per cent to S$97.7 million and contributed to 47 per cent of total revenue. 

It helped to cushion a 13 per cent decline in equities and fixed income businesses, which fell from S$99.7 million to S$86.4 million. 

Revenue from equity and commodities rose 11 per cent to S$64.9 million, mainly due to higher volumes in SGX FTSE China A50 futures arising from higher volatility in the underlying market, as well as higher activity in USD/CNH and INR/USD FX futures contracts, SGX said.

An interim dividend of 7.5 cents per share was declared by its board of directors, an increase of 2.5 cents from the previous year.

"Looking ahead, the continued market volatility will increase the demand for risk management and investment solutions," SGX CEO Loh said. 

"Our expanded MSCI Net Total Return index futures suite is gaining traction and will continue to deliver results, together with our broad range of Asian derivative products and recently developed FlexC FX futures."

Mr Loh also said that SGX will extend its product offerings in the securities market to cater to evolving investor needs, adding that new offices will open in New York and San Francisco to acquire new customers and enhance client coverage. 

Source: Reuters/CNA/na(ra)

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